Twentieth International Conference on Environmental, Cultural, Economic & Social Sustainability

Abstract

The present paper has the objective to develop three new approaches to macrodynamics. Firstly, we design a new model where capacity utilization is defined by the difference between population (represented by the sum of activity and unemployed labor force), and capital stock growth rates. Second, we spread unemployment into both, the natural one and the other caused by external reasons. Third, we incorporate the SIR’s (Susceptible, Infectious, or Recovered) approach into the second framework to understand how Pandemics can affect economic behavior. Then, we proved the stable condition of all three cases and also consider a numerical simulation to ensure their economic efficiency. As a result, the first model acts exactly like a post-Keynesian (neo-Kaleckian) expects it to behave (in the short and medium runs it is possible to assume unemployment, but in a long-period full employment is arrived). Despite the convergence of capacity utilization to its normal level, it seems that, in the second case, we will have a time lag of involuntary unemployment. In the third case, when the epidemiological model is considered (if, and only if, the Pandemic is the only reason for unemployment caused by external motives), the model will converge to full employment of factors like in the first case. These models serve as an inspiration to guide policymakers on how to deal with epidemiological crises and their consequences in the labor market.