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Belief-driven dynamics in a behavioral SEIRD macroeconomic model with sceptics

Author

Listed:
  • Christian R. Proaño
  • Tomasz Makarewicz

Abstract

The reluctance of a significant number of individuals in the current COVID-19 pandemic to adhere to social distancing measures - and even to get vaccinated - seems to be one of the major obstacles for the long-term success of public health policies around the world. Against this background we study the impact of boundedly rational perceptions for the dynamics of epidemics such as the COVID-19 pandemic in a standard epidemic model extended by a stylized macroeconomic dimension similar to Atkeson et al. (2021). We show through which channels misperceptions or even “scepticism” concerning the infectiousness of the decease or its mortality rate may undermine in the long-run the effectiveness of lockdowns and other public health policies.

Suggested Citation

  • Christian R. Proaño & Tomasz Makarewicz, 2021. "Belief-driven dynamics in a behavioral SEIRD macroeconomic model with sceptics," CAMA Working Papers 2021-51, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2021-51
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2021-06/51_2021_proano_makarewicz0.pdf
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    Citations

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    Cited by:

    1. Patrick Mellacher, 2022. "Endogenous viral mutations, evolutionary selection, and containment policy design," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 17(3), pages 801-825, July.
    2. Mellacher, Patrick, 2023. "The impact of corona populism: Empirical evidence from Austria and theory," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 113-140.
    3. Di Guilmi, Corrado & Galanis, Giorgos & Proaño, Christian R., 2023. "A Baseline Model of Behavioral Political Cycles and Macroeconomic Fluctuations," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 50-67.

    More about this item

    Keywords

    Endogenous Cycles; COVID-19 Pandemic; Bounded Rationality; Heterogenous Expectations;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E7 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics
    • I1 - Health, Education, and Welfare - - Health

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