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 frame scepticism with the logistic switching model: agents are more willing to believe in social distancing measures if the number of infections or deaths is high, but less if those measures trigger an economic downturn. We show that such a ``scepticism'' undermines the effectiveness of lockdowns, in particular when the recovered population loses virus immunity over time