Macroeconomic Modelling of Infectious Diseases: Conceptual Frameworks

The COVID-19 pandemic has shown that infectious diseases can generate far-reaching, economy-wide impacts that extend well beyond the health sector. This paper highlights the importance of expanding the scope of infectious disease studies to capture the full spectrum of economic impacts, which has significant implications for public health investment. We systematically examine the channels through which infectious diseases can affect the macroeconomy, and outline four broad approaches, both established and novel, to integrating epidemiological models of infectious disease transmission and outcomes into macroeconomic models: (1) basic link: no formal epidemiological models; (2) exogenous link: one-way linkage from epidemiological to macroeconomic models; (3) semi-endogenous link: two-way external linkage between epidemiological and macroeconomic models; and (4) endogenous link: two-way internal linkage between epidemiological and macroeconomic models, each reflecting a different degree of epidemiological-macroeconomic integration. Future research on the macroeconomic modelling of infectious disease impacts would benefit from deeper integration of epidemiological and macroeconomic models through exogenous or endogenous link approaches. This involves a trade-off between technical complexity and model granularity in both epidemiological and macroeconomic components.