On the Optimal "Lockdown" during an Epidemic

Gonzalez-Eiras, Martín; Niepelt, Dirk (April 2020). On the Optimal "Lockdown" during an Epidemic (CESifo Working Papers 8240). Munich: CESifo

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We embed a lockdown choice in a simplified epidemiological model and derive formulas for the optimal lockdown intensity and duration. The optimal policy reflects the rate of time preference, epidemiological factors, the hazard rate of vaccine discovery, learning effects in the health care sector, and the severity of output losses due to a lockdown. In our baseline specification a Covid-19 shock as currently experienced by the US optimally triggers a reduction in economic activity by two thirds, for about 50 days, or approximately 9:5 percent of annual GDP.

Item Type:	Working Paper
Division/Institute:	03 Faculty of Business, Economics and Social Sciences > Department of Economics
UniBE Contributor:	Niepelt, Dirk
Subjects:	300 Social sciences, sociology & anthropology > 330 Economics
ISSN:	2364-1428
Series:	CESifo Working Papers
Publisher:	CESifo
Language:	English
Submitter:	Dino Collalti
Date Deposited:	12 Jan 2021 15:34
Last Modified:	05 Dec 2022 15:43
JEL Classification:	I180
URI:	https://boris.unibe.ch/id/eprint/150700