The COVID-19 pandemic is still ravaging the planet, but its (short-, medium-, and long-term) diverse effects on health, economy, and society are far from being understood. This article investigates the potential impact of a deadly epidemic and its main nonpharmaceutical control interventions (social distancing vs. testing-tracing-isolation, TTI) on capital accumulation and economic development at different time scales. This is done by integrating an epidemiological susceptible-infectious-recovered model with a Solow-type growth model including public expenditure, as a parsimonious setting to offer insights on the trade-off between protecting human lives and the economy and society. The work clarifies (i) the long-term interactions amongst a deadly infection, demography, and capital accumulation, (ii) the lack of viability of persistent social distancing measures also using an analytical characterization, and the threat of policy-enhanced COVID-19 endemicity, (iii) the potentially high return on investments in TTI activities to avoid future lockdowns and related capital disruption. It also quantifies the welfare effects of a range of policies, confirming a counterintuitive role for tax-funded preventive investments aimed at strengthening TTI as more desirable interventions than generalized lockdowns.

COVID-19 Epidemic and Mitigation Policies: Positive and Normative Analyses in a Neoclassical Growth Model

Gori L;Manfredi P;Marsiglio S;
2022-01-01

Abstract

The COVID-19 pandemic is still ravaging the planet, but its (short-, medium-, and long-term) diverse effects on health, economy, and society are far from being understood. This article investigates the potential impact of a deadly epidemic and its main nonpharmaceutical control interventions (social distancing vs. testing-tracing-isolation, TTI) on capital accumulation and economic development at different time scales. This is done by integrating an epidemiological susceptible-infectious-recovered model with a Solow-type growth model including public expenditure, as a parsimonious setting to offer insights on the trade-off between protecting human lives and the economy and society. The work clarifies (i) the long-term interactions amongst a deadly infection, demography, and capital accumulation, (ii) the lack of viability of persistent social distancing measures also using an analytical characterization, and the threat of policy-enhanced COVID-19 endemicity, (iii) the potentially high return on investments in TTI activities to avoid future lockdowns and related capital disruption. It also quantifies the welfare effects of a range of policies, confirming a counterintuitive role for tax-funded preventive investments aimed at strengthening TTI as more desirable interventions than generalized lockdowns.
2022
Gori, L; Manfredi, P; Marsiglio, S; Sodini, M
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11568/1110118
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