Infectious Disease Control and Human Health Investment: Learning by Controlling
AbstractThis paper develops a model that allows a two-way interaction between disease dynamics, where infected acquire permanent immunity, and economic dynamics that relies on Ebola Virus Disease (EVD) epidemiology model and a one-sector growth model. We endogenize the disease’s incidence on economy to study health investment, disease control and learning associated with it.
We calibrate the model and simulate results that allow an understanding of how the discount rate could affect the steady states of economic variables. In the economy, there is a disease-free steady state that is parameter-free and an endemic steady state that depends on parameter values. Disease control and health capital accumulation increase for decreasing discount rate. The pattern of learning-by-controlling, although increasing for a low discount rate, is non-linear and non-monotone.
Like learning-by-controlling, under the endemic scenario, labor, consumption, output share of disease control and medical expenditures, medical expenditures, output as well as the fraction of the susceptible and recovered exhibit non-linearities in equilibrium outcomes that shed light into the interactions between the dynamics of the economy and disease. The model improves diseases and economy dynamics simultaneous modeling that could bring about insights on impacts of the diseases on economies; thus, guiding disease preparedness and responsiveness and policies that address them in countries that are severely and recurrently embattled with infectious diseases