The complex interplay between COVID-19 and economic activity

Area of Science:

• Epidemiology
• Mathematical Biology
• Economics

Background:

• The COVID-19 pandemic significantly impacted global economic activity.
• Existing epidemiological models (e.g., SIR-like) do not fully capture economic dynamics.
• Understanding the interplay between public health crises and economies is crucial.

Purpose of the Study:

• To develop a novel dynamical system modeling the complex interactions between COVID-19 and economic activity.
• To explore the co-dynamics of pandemics and economies beyond traditional epidemiological frameworks.
• To identify key parameters influencing the observed stylized facts of pandemic-economic interactions.

Main Methods:

• Introduction of a novel dynamical system incorporating economic factors.
• Analysis of system equilibrium and stability properties.
• Numerical simulations to reproduce pandemic waves and economic co-dynamics.
• Application of Lotka-Volterra principles to model observed interactions.

Main Results:

• The dynamical system's equilibrium is an unstable focus, leading to increasing fluctuations in size and periodicity.
• Numerical simulations successfully generated pandemic waves mirroring real-world dynamics.
• The model demonstrates Lotka-Volterra co-dynamics between the pandemic and economic activity, confirmed by simulations.
• Qualitative replication of key stylized facts linking pandemics and economic behavior.

Conclusions:

• The developed dynamical system offers a new approach to modeling coupled pandemic-economic systems.
• The findings highlight the emergence of Lotka-Volterra co-dynamics, providing insights into cyclical patterns.
• The study deepens understanding of parameter influences on pandemic-economic interactions and their shaping.