Motivated by the prevailing severe situation in India, we extend the SIR(S) model of infectious diseases to incorporate demand dynamics and its interaction with COVID-19 spread. We argue that, on one hand, the spread of COVID-19 creates panic among consumers and firms and negatively affects economic activity. On the other hand, economic activity intensifies the spread of the infection. Initially assuming that recovered individuals do not develop antibodies and become susceptible again, we capture the interaction between economic activity and the spread of the disease in a two-dimensional dynamical system. We show that a large fiscal expansion combined with measures to boost community health and improve the health sector's capacity to provide critical care can simultaneously improve the economy and control the spread of the disease. Finally, assuming that only a fraction of recovered individuals become susceptible to contracting the diseases again, we obtain richer dynamics in a three-dimensional dynamical system. This paper also highlights the important role of infection rates and the recovery rate in determining the uniqueness and the stability properties of steady state.

This paper analytically examines the demand for surgical masks following the recent health precautions due to coronavirus. Using a simple linear demand curve and alternatively examining the impacts of requirements that mandate (a) the wearing of masks by frontline workers; (b) suggested but not required masking by the whole public; and (c) compulsory masking by the whole public. The impacts of the different scenarios on the price elasticity of demand are determined along with the slope (or the rate of change) of elasticity. Some of these results differ when a non-linear demand curve is considered instead. The equilibrium mask prices increase when masks are universally mandated, whereas the consumer surplus is higher when masks are recommended but not mandated. However, the ranking of consumer surplus is shown to be sensitive to the supply elasticity of masks. These considerations enable a structured means to view the demand implications of masking requirements and provide some food for policy thought.

This paper deals with the problem of new intermediate products within a simple model, where production is circular and goods enter into the production of other goods. It studies the process by which the new good is absorbed into the economy and the structural transformation that goes with it. By means of a long-period method the forces of structural transformation are examined, in particular the shift of existing means of production towards the innovation and the mechanism of differential growth in terms of alternative techniques and their associated systems of production. We treat two important Schumpeterian topics: the question of technological unemployment and the problem of 'forced saving' and the related problem of an involuntary reduction of real consumption per capita. It is shown that both phenomena are potential by-products of the transformation process.

The article explores the impact of the diffusion of new methods of production on output and employment growth and income distribution within a Classical one-sector framework. Disequilibrium paths are studied analytically and in terms of simulations. Diffusion by differential growth affects aggregate dynamics through several channels. The analysis reveals the non-steady nature of economic change and shows that the adaptation pattern depends both on the innovation's factor-saving bias and on the extent of the bias, which determines the strength of the selection pressure on non-innovators. The typology of different cases developed shows various aspects of Schumpeter's concept of creative destruction.