Pandemic effects in the Solow growth model.

ABSTRACT: We show how diseases can affect economic growth in a Solow growth model, with population growth and no technical progress, but modified to include a saving rate that depends on the individual health status. We successively insert this model into the SIS (susceptible-infected-susceptible) and SIR (susceptible-infected-recovered) models of disease spreading. In these two models, the spread of the infection proceeds according to the so-called basic reproductive number. This number determines in which of the two possible equilibria, the disease-free or the pandemic equilibrium, the economy ends. We show that output per capita is always lower in the pandemic steady state, which implies a contraction in the economy's production possibilities frontier.

SUBMITTER: Carmona J 

PROVIDER: S-EPMC9874504 | biostudies-literature | 2022 Oct

REPOSITORIES: biostudies-literature