Belief-driven Dynamics in a Behavioral SEIRD Macroeconomic Model with Sceptics

The reluctance of a significant number of individuals in the current COVID-19 pandemic to adhere to social distancing measures - and even to get vaccinated - seems to be one of the major obstacles for the long-term success of public health policies around the world. Against this background we study the impact of boundedly rational perceptions for the dynamics of epidemics such as the COVID-19 pandemic in a standard epidemic model extended by a stylized macroeconomic dimension similar to Atkeson et al. (2021). We show through which channels misperceptions or even “scepticism” concerning the infectiousness of the decease or its mortality rate may undermine in the long-run the effectiveness of lockdowns and other public health policies