Infectious Diseases and Economic Growth
AbstractThis paper develops a framework to study the economic impact of infectious diseases by integrating epidemiological dynamics into a continuous time neo-classical growth model. There is a two way interaction between the economy and the disease: the incidence of the disease affects labor supply and investment in health capital can affect the incidence and recuperation from the disease. Thus, both the disease incidence and the income levels are endogenous. It is a general framework to study the effect and control of infectious diseases where there is an interaction with physical capital and health expenditures. The dynamics of the disease make the control problem non-convex and thus, a new existence theorem is given. We fully characterize the local dynamics of the model. There can be multiple steady states, and as the underlying parameters change there can be bifurcations. There can also be steady states where the disease is endemic but the optimal response is not to spend any resources on controlling it. We also see how the endogenous variables change as some underlying economic parameters are varied.
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Bibliographic InfoPaper provided by LERNA, University of Toulouse in its series LERNA Working Papers with number 11.04.338.
Date of creation: Feb 2011
Date of revision:
Other versions of this item:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-12 (All new papers)
- NEP-DEV-2011-03-12 (Development)
- NEP-FDG-2011-03-12 (Financial Development & Growth)
- NEP-HEA-2011-03-12 (Health Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hippolyte d'Albis & Pascal Gourdel & Cuong Le Van, 2004.
"Existence of solutions in continuous-time optimal growth models,"
Cahiers de la Maison des Sciences Economiques
b04063, Université Panthéon-Sorbonne (Paris 1).
- Hippolyte d’Albis & Pascal Gourdel & Cuong Le Van, 2008. "Existence of solutions in continuous-time optimal growth models," Economic Theory, Springer, vol. 37(2), pages 321-333, November.
- Hippolyte D'Albis & Pascal Gourdel & Cuong Le Van, 2008. "Existence of Solutions in Continuous-time Optimal Growth Models," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00177269, HAL.
- D'ALBIS Hippolyte & GOURDEL Pascal & LE VAN Cuong, 2007. "Existence of Solutions in Continuous-time Optimal Growth Models," LERNA Working Papers 07.11.232, LERNA, University of Toulouse.
- Chakraborty, Shankha & Papageorgiou, Chris & Perez Sebastian, Fidel, 2013. "Health Cycles and Health Transitions," MPRA Paper 50588, University Library of Munich, Germany.
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