Topic: Health and Economic Inequality during pandemics: A heterogeneous Agent Perspective
This paper investigates the heterogeneous health and economic effects of a pandemic in a continuous time heterogeneous agent framework (HACT). We develop a parsimonious model to study optimal infection preventing and recuperative expenditure decisions in a model where agents are differentiated by wealth levels and their endogenous health status when the infectious disease (i.e. Covid-19) follows SIRS dynamics. We show that expenditures on infection prevention are not only increasing but also have higher wealth elasticity. In equilibrium, wealthier agents have better health outcomes which leads to higher income as their labor income is less affected by the pandemic. In a pandemic income inequality increases and so do the health outcomes consistent with the empirical evidence Wealth inequality is also increased but less responsive We do not have to rely on other mechanisms such as differentia ability to work from home, access to health care differences in preferences, or different sectoral contact structures to generate the results. The paper shows that pandemics can exacerbate health and economic inequalities.
Speaker Profile: Pang Haokun
Mr. Pang is a PhD student at the University of Birmingham and a graduate of Class 16 of the School of Public Finance and Taxation at ZUEL. His main research interests are macroeconomics, control theory and dynamic programming in continuous time, and the economics of infectious diseases. He has produced a number of working papers which have been accepted for conferences such as the Europe an Workshop on Economic Theory (EWET) Society for the Advancement of Economic Theory (SAET).
Time: 19 May 2023 (Thursday) 11:00-12:30
Moderator: Lu Yuanping (Executive Director of IIDPF)
Venue: Conference Room 119, Wenqin Building