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Environment, public debt and epidemics

Author

Listed:
  • Marion Davin

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro - Montpellier SupAgro - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

  • Mouez Fodha

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Thomas Seegmuller

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

We study whether fiscal policies, especially public debt, can help to curb the macroeconomic and health consequences of epidemics. Our approach is based on three main features: we introduce the dynamics of epidemics in an overlapping generations model to take into account that old people are more vulnerable; people are more easily infected when pollution is high; public spending and public debt can be used to tackle the effects of epidemics. We show that fiscal policies can promote the convergence to a stable steady state with no epidemics. When public policies are not able to permanently eradicate the epidemic, public debt and income transfers could reduce the number of infected people and increase capital and GDP per capita. As a prerequisite, pollution intensity should not be too high. Finally, we define a household subsidy policy which eliminates income and welfare inequalities between healthy and infected individuals.

Suggested Citation

  • Marion Davin & Mouez Fodha & Thomas Seegmuller, 2022. "Environment, public debt and epidemics," Post-Print halshs-04948522, HAL.
    • Handle: RePEc:hal:journl:halshs-04948522
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    Cited by:

    1. Thuilliez, Josselin & Touré, Nouhoum, 2024. "Opinions and vaccination during an epidemic," Journal of Mathematical Economics, Elsevier, vol. 111(C).
    2. Luca Gori & Piero Manfredi & Simone Marsiglio & Mauro Sodini, 2023. "A parsimonious model of optimal social distancing and vaccination during an outbreak," Discussion Papers 2023/292, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    3. Josselin Thuilliez & Nouhoum Touré, 2024. "Opinions and vaccination during an epidemic," Post-Print hal-04490900, HAL.
    4. Carmen Camacho & Chrysovalantis Vasilakis, 2024. "Transmissible diseases, vaccination, and inequality," Post-Print halshs-04805658, HAL.
    5. Anna Dugan & Alexia Prskawetz & Natacha Raffin, 2024. "The environment, life expectancy, and growth in overlapping generations models: A survey," Journal of Economic Surveys, Wiley Blackwell, vol. 38(5), pages 1593-1621, December.
    6. Cavalli, Fausto & Naimzada, Ahmad & Visetti, Daniela, 2024. "Dynamical analysis of healthcare policy effects in an integrated economic-epidemiological model," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 221(C), pages 315-336.
    7. Camacho, Carmen & Vasilakis, Chrysovalantis, 2023. "Transmissible Diseases, Vaccination and Inequality," IZA Discussion Papers 16504, Institute of Labor Economics (IZA).
    8. Rabah Amir & Raouf Boucekkine, 2023. "Epidemics, vaccines, and health policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(6), pages 1143-1148, December.
    9. Nicolas Clootens & Francesco Magris, 2024. "Nonrenewable resource use sustainability and public debt," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 26(1), February.
    10. Alm James & Barreto Raul A., 2024. "Trust in Government in a Changing World: Shocks, Tax Evasion, and Economic Growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 24(1), pages 439-487, January.
    11. Carmen Camacho & Chrysovalantis Vasilakis, 2024. "Transmissible diseases, vaccination, and inequality," PSE-Ecole d'économie de Paris (Postprint) halshs-04805658, HAL.
    12. Fausto Cavalli & Ahmad Naimzada & Daniela Visetti, 2025. "Dynamical analysis of an OLG model with interacting epidemiological and environmental domains," Working Papers 555, University of Milano-Bicocca, Department of Economics.
    13. Bosi, Stefano & Camacho, Carmen & Desmarchelier, David, 2024. "Natural versus artificial herd immunity: Is vaccine research investment always optimal?," Research in Economics, Elsevier, vol. 78(4).
    14. Josselin Thuilliez & Nouhoum Touré, 2024. "Opinions and vaccination during an epidemic," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04490900, HAL.

    More about this item

    Keywords

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    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • Q59 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Other

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