Economic collapse under epidemic-induced lockdowns and its prediction: A coupled dynamics approach

Area of Science:

• Epidemiology
• Economics
• Public Health Policy

Background:

• Epidemic outbreaks significantly challenge global poverty alleviation efforts.
• Government-imposed restrictions, including social and economic lockdowns, are crucial for disease suppression.
• The economic impact of extensive economic lockdown measures remains under-researched.

Purpose of the Study:

• To address the gap in understanding the economic consequences of epidemic-related restrictions.
• To propose and analyze a novel coupled epidemiological-economic model incorporating economic lockdown (EL) effects.
• To investigate the relationship between EL stringency, economic status, and disease burden.

Main Methods:

• Development of a novel coupled epidemiological-economic model.
• Integration of economic lockdown (EL) effects into the model.
• Empirical validation using structural statistical equation analysis.

Main Results:

• The model demonstrates multi-stability based on EL stringency and a country's economic status.
• A reciprocal relationship between economic health and disease burden was identified.
• Minor EL stringency can destabilize low-income economies; middle-income countries face stagnation and potential middle-income traps.

Conclusions:

• Economic lockdown measures have significant, often overlooked, economic consequences.
• Policymakers must balance public health interventions with economic stability to prevent poverty and middle-income traps.
• Early warning signals for economic collapse due to EL stringency can be identified across diverse economies.