An autonomous research institute under the Ministry of Finance


On the Macrodynamics of COVID-19 Vaccination

Publication date

Aug, 2021


NIPFP Working Paper No. 352


Soumya Datta and C. Saratchand


We set up a macroeconomic epidemiological (SIR) model to evaluate the role of vaccination in the interactive dynamics of COVID-19 and the economy. We analytically examine the existence and local stability properties of the four steady states and find strong support for a locally stable interior equilibrium where the economy grows in the continued presence of the pandemic. We also find that it might be possible to attain a pandemic-free economic revival only if the rate of recovery from infection is faster than a threshold level. We examine, both analytically and numerically, the impact of various types of  policy interventions, including non-pharmaceutical interventions involving restrictions on economic activities (like lockdowns and travel restrictions) as well as speeding up the rate of vaccination. We find that under reasonable parameter configurations, a combination of large-scale vaccination as well as non-pharmaceutical interventions are required to meet the twin objectives of controlling the pandemic and reviving the economy.
Keywords: COVID-19, health, stability, vaccination, non pharmaceutical intervention .
JEL classification: E10, E61, I10, I18.
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