Optimal Trade-Off Between Economic Activity and Health During an Epidemic

Research output: Other contributionWeb publication/Blog post

Abstract

Thispaperconsidersasimplemodelwhereasocialplannercaninfluencethespread-intensity of an infection wave, and, consequently, also the economic activity and population health, throughasingleparameter. Populationhealthisassumedtoonlybenegativelyaffectedwhen thenumberofsimultaneouslyinfectedexceedshealthcarecapacity. Themainfindingisthat if (i) the planner attaches a positive weight on economic activity and (ii) it is more harmful for the economy to be locked down for longer than shorter time periods, then the optimal policy is to (weakly) exceed health care capacity at some time.

Details

Authors
Organisations
External organisations
  • University of Essex
  • Uppsala University
  • Stockholm School of Economics
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics

Keywords

  • Covid-19 pandemic, SI-model, economic activity, health, optimal policy
Original languageEnglish
Number of pages12
Publication statusUnpublished - 2020 May 18
Publication categoryResearch
Peer-reviewedNo