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Positive and Normative Issues of Economic Growth with Infectious Disease

Author

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  • Doriana Delfino
  • Peter J. Simmons

Abstract

This paper uses a variant of the Lotka-Volterra system explaining the dynamic interaction between populations of infected and healthy individuals in which the demographic and epidemiological parameters (the net healthy birth rate, the death rate of the infected and the infection rate) are functions of economic variables and some simple economic growth models to examine deterministic growth paths of the system with an exogenous savings rate. Demographic-epidemiological parameters depend on productive capital which combined with healthy workers produces output. We find that there are generally multiple steady states. The system usually converges to a steady state in which the economy moderates the disease. If capital accumulation is set optimally to maximise welfare then there may be multiple steady states and optimal growth paths generally display four dimensional saddle point properties. Extensions of the framework to allow for density dependent infection, recovery from the disease and alternative social welfare functions are analysed.

Suggested Citation

  • Doriana Delfino & Peter J. Simmons, "undated". "Positive and Normative Issues of Economic Growth with Infectious Disease," Discussion Papers 00/48, Department of Economics, University of York.
  • Handle: RePEc:yor:yorken:00/48
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    File URL: https://www.york.ac.uk/media/economics/documents/discussionpapers/2000/0048.pdf
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    References listed on IDEAS

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    3. Paul A. Grout, 1982. "Welfare Economics of Decision Making with Changing Preferences," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 83-90.
    4. Bartel, Ann & Taubman, Paul, 1979. "Health and Labor Market Success: The Role of Various Diseases," The Review of Economics and Statistics, MIT Press, vol. 61(1), pages 1-8, February.
    5. Dasgupta, Partha, 1974. "On some alternative criteria for justice between generations," Journal of Public Economics, Elsevier, vol. 3(4), pages 405-423, November.
    6. Lee, Lung-Fei, 1982. "Health and Wage: A Simultaneous Equation Model with Multiple Discrete Indicators," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 23(1), pages 199-221, February.
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    Cited by:

    1. Lin Liu & Aditya Goenka, 2017. "Infectious Diseases, Human Capital and Economic Growth," 2017 Meeting Papers 1218, Society for Economic Dynamics.
    2. Stefano Bosi & David Desmarchelier, 2016. "Pollution and infectious diseases," Working Papers 2016.22, FAERE - French Association of Environmental and Resource Economists.
    3. Aditya Goenka & Lin Liu, 2012. "Infectious diseases and endogenous fluctuations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 125-149, May.
    4. Goenka, Aditya & Liu, Lin & Nguyen, Manh-Hung, 2014. "Infectious diseases and economic growth," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 34-53.

    More about this item

    Keywords

    economic growth; infectious disease; dynamic optimal control.;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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