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Using the Solow Growth Model. The Impact of Endemic Diseases on Economic Growth

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  • Julio Carmona

    (University of Alicante, D. Quantitative Methods and Economic Theory)

Abstract

The recent sad news about the Robert Solow’s decease has motivated a review of his most celebrated contribution to Economics, his model of economic growth. In this paper, I illustrate its versatility and usefulness by combining it with the problem that endemic diseases has for the economic performance of most emerging economies. The literature about economic development have examined this problem with particular emphasis on the necessary sanitary measures to raise the level of health. These measures have been advocated on the basis that they will have big positive effects on productivity, real wages and per capita GDP. To illustrate to our undergraduate students both, the value of health for economic development and the intuitions the Solow model can provide, I couple it with the so called SIS model, a concise description of persistent diseases. This will help to illustrate how endemic diseases affect negatively society’s welfare and, for the case in which the endemic disease increases the mortality rate, the rate of economic growth.

Suggested Citation

  • Julio Carmona, 2024. "Using the Solow Growth Model. The Impact of Endemic Diseases on Economic Growth," QM&ET Working Papers 24-1, University of Alicante, D. Quantitative Methods and Economic Theory.
    • Handle: RePEc:ris:qmetal:2024_001
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    References listed on IDEAS

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    1. Goenka, Aditya & Liu, Lin & Nguyen, Manh-Hung, 2021. "SIR economic epidemiological models with disease induced mortality," Journal of Mathematical Economics, Elsevier, vol. 93(C).
    2. Mark Gersovitz & Jeffrey S. Hammer, 2004. "The Economical Control of Infectious Diseases," Economic Journal, Royal Economic Society, vol. 114(492), pages 1-27, January.
    3. Christopher Avery & William Bossert & Adam Clark & Glenn Ellison & Sara Fisher Ellison, 2020. "An Economist's Guide to Epidemiology Models of Infectious Disease," Journal of Economic Perspectives, American Economic Association, vol. 34(4), pages 79-104, Fall.
    4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Keywords

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    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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