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:

12 Jan 2021 15:34

JEL Classification:

I180

URI:

https://boris.unibe.ch/id/eprint/150700

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