Modern Infectious Diseases: Macroeconomic Impacts and Policy Responses

52 Pages Posted: 31 Aug 2020

See all articles by David E. Bloom

David E. Bloom

Harvard University - T.H. Chan School of Public Health; National Bureau of Economic Research (NBER)

Michael Kuhn

University of Vienna - Vienna Institute of Demography

Klaus Prettner

Vienna University of Economics and Business - Department of Economics

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Abstract

We discuss and review literature on the macroeconomic effects of epidemics and pandemics since the late 20th century. First, we cover the role of health in driving economic growth and well-being and discuss standard frameworks for assessing the economic burden of infectious diseases. Second, we sketch a general theoretical framework to evaluate the tradeoffs policymakers must consider when addressing infectious diseases and their macroeconomic repercussions.In so doing, we emphasize the dependence of economic consequences on (i) disease characteristics; (ii) inequalities among individuals in terms of susceptibility, preferences, and income; and (iii) cross-country heterogeneities in terms of their institutional and macroeconomic environments. Third, we study pharmaceutical and nonpharmaceutical policies aimed at mitigating and preventing infectious diseases and their macroeconomic repercussions. Fourth, we discuss the health toll and economic impacts of five infectious diseases:HIV/AIDS, malaria, tuberculosis, influenza, and COVID-19. Although major epidemics and pandemics can take an enormous human toll and impose a staggering economic burden, early and targeted health and economic policy interventions can often mitigate both to a substantial degree.

Keywords: inequality, pandemics, epidemics, COVID-19, HIV/AIDS, malaria, tuberculosis, influenza, infectious disease, economic burden of disease, economic growth, health, economic epidemiology, SIR Model, general equilibrium macroeconomic models, welfare, human capital, health policy

JEL Classification: D15, D58, E10, E20, I12, I15, I18, I31, O40

Suggested Citation

Bloom, David E. and Kuhn, Michael and Prettner, Klaus, Modern Infectious Diseases: Macroeconomic Impacts and Policy Responses. IZA Discussion Paper No. 13625, Available at SSRN: https://ssrn.com/abstract=3682939 or http://dx.doi.org/10.2139/ssrn.3682939

David E. Bloom (Contact Author)

Harvard University - T.H. Chan School of Public Health ( email )

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Boston, MA MA 02115
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National Bureau of Economic Research (NBER)

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Michael Kuhn

University of Vienna - Vienna Institute of Demography ( email )

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Austria

Klaus Prettner

Vienna University of Economics and Business - Department of Economics ( email )

Augasse 2-6
A-1090 Wien
Austria

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