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Diseases, infection dynamics, and development

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  • Chakraborty, Shankha
  • Papageorgiou, Chris
  • Pérez Sebastián, Fidel

Abstract

The relationship between health and development is a subject of ongoing debate. This paper contributes to the debate by proposing a general equilibrium theory of infectious disease transmission, prevention investment, and rational behavior. Diseases cause premature death, labor productivity loss and lower quality of life. Higher disease prevalence lowers the average saving-investment propensity. The model offers two insights. First, infectious disease can plausibly generate an unconventional growth trap where income alone cannot push an economy out of underdevelopment. Second, even when countries converge to the same balanced growth path, the disease ecology significantly impairs the pace of economic development.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 57 (2010)
Issue (Month): 7 (October)
Pages: 859-872

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Handle: RePEc:eee:moneco:v:57:y:2010:i:7:p:859-872

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Web page: http://www.elsevier.com/locate/inca/505566

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Citations

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Cited by:
  1. Chakraborty, Shankha & Papageorgiou, Chris & Perez Sebastian, Fidel, 2013. "Health Cycles and Health Transitions," MPRA Paper 50588, University Library of Munich, Germany.
  2. Tol, Richard S. J., 2011. "Poverty Traps and Climate Change," Papers WP413, Economic and Social Research Institute (ESRI).
  3. Shu-Chen Chang & Teng-Yu Chang, 2012. "Threshold Effects of Economic Growth on Air Pollution under Regimes of Corruption," Economics Bulletin, AccessEcon, vol. 32(1), pages 1046-1059.
  4. Fanti, Luciano & Gori, Luca & Tramontana, Fabio, 2011. "Endogenous lifetime, accidental bequests and economic growth," MPRA Paper 34647, University Library of Munich, Germany.
  5. Aksan, Anna-Maria & Chakraborty, Shankha, 2013. "Twin Transitions," MPRA Paper 49929, University Library of Munich, Germany.
  6. Fenichel, Eli P., 2013. "Economic considerations for social distancing and behavioral based policies during an epidemic," Journal of Health Economics, Elsevier, vol. 32(2), pages 440-451.
  7. Sheikh Shahnawaz, 2011. "Infectious disease outbreak and trade policy formulation," Economics Bulletin, AccessEcon, vol. 31(4), pages 2959-2967.
  8. Shin, Inyong, 2013. "The Effect of Compressed Demographic Transition and Demographic Gift on Economic Growth," MPRA Paper 45003, University Library of Munich, Germany.
  9. Fanti, Luciano & Gori, Luca, 2010. "Endogenous fertility, endogenous lifetime and economic growth: the role of child policies," MPRA Paper 26146, University Library of Munich, Germany.
  10. Arshia Amiri & Ulf-g Gerdtham & Bruno Ventelou, 2012. "HIV/AIDS-GDP Nexus? Evidence from panel-data for African countries," Economics Bulletin, AccessEcon, vol. 32(1), pages 1060-1067.
  11. Luciano Fanti & Luca Gori, 2012. "Public Expenditure on Health and Private Old-Age Insurance in an OLG Growth Model with Endogenous Fertility: Chaotic Dynamics Under Perfect Foresight," Computational Economics, Society for Computational Economics, vol. 40(4), pages 333-353, December.
  12. Pierre-Richard Agénor, 2012. "A Computable OLG Model for Gender and Growth Policy Analysis," Centre for Growth and Business Cycle Research Discussion Paper Series 169, Economics, The Univeristy of Manchester.

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