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Knowledge, germs, and output.

ABSTRACT: This paper studies the equilibrium and the social optimum in an economy where knowledge diffusion interacts with disease transmission. Knowledge increases productivity and is diffused through learning. A learner chooses the intensities in normal learning, isolated learning and production. Normal learning is more effective than isolated learning but requires a learner to contact a teacher. A higher intensity in normal learning increases a learner's contact rate with a teacher, thereby speeding up both knowledge diffusion and the transmission of an infectious pathogen. An infection reduces productivity and possibly results in death. Calibrating the pathogen to Covid-19, the model shows that the unexpected arrival of the pathogen induces a susceptible learner to adjust the normal learning intensity in a V-shaped pattern over time. Aggregate output also follows V-shaped adjustments. Switching from the equilibrium to the social optimum reduces infections and deaths substantially and increases social welfare. I also examine temporary lockdowns in the equilibrium.

SUBMITTER: Shi S

PROVIDER: S-EPMC9212715 | biostudies-literature | 2023 Apr

REPOSITORIES: biostudies-literature

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Knowledge, germs, and output.

Shi Shouyong S

Review of economic dynamics 20220617

This paper studies the equilibrium and the social optimum in an economy where knowledge diffusion interacts with disease transmission. Knowledge increases productivity and is diffused through learning. A learner chooses the intensities in normal learning, isolated learning and production. Normal learning is more effective than isolated learning but requires a learner to contact a teacher. A higher intensity in normal learning increases a learner's contact rate with a teacher, thereby speeding up ...[more]

PMID: 35755488

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