Road to recovery: Managing an epidemic
Simon Loertscher, Ellen Muir
Journal of Mathematical Economics | ELSEVIER SCIENCE SA | Published : 2021
Without widespread immunization, the road to recovery from the current COVID-19 lockdowns will optimally follow a path that finds the difficult balance between the social and economic benefits of liberty and the toll from the disease. We provide an approach that combines epidemiology and economic models, taking as given that the maximum capacity of the healthcare system imposes a constraint that must not be exceeded. Treating the transmission rate as a decreasing function of the severity of the lockdown, we first determine the minimal lockdown that satisfies this constraint using an epidemiology model with a homogeneous population to predict future demand for healthcare. Allowing for a heter..View full abstract
We thank an anonymous referee and the co-editors of this journal for comments and suggestions that have helped us improve the paper. We are also grateful for feedback from and discussion with Eric Budish, Gabriel Carroll, Chris Edmond, Ian Harper, Zi Yang Kang, Paul Milgrom, Martin Souchier, Gary Stoneham and seminar audiences at the COVID-19 Policy Hackathon organized by the Stanford Economic Association and the MIT Undergraduate Economic Association and at the University of Melbourne. Anand Bharadwaj provided excellent research assistance. Financial support by the June and Samuel Hordern Endowment is also gratefully acknowledged.