On the optimal 'lockdown' during an epidemic
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On the optimal 'lockdown' during an epidemic. / Gonzalez-Eiras, Martin; Niepelt, Dirk.
In: Covid Economics, Vol. 1, No. 7, 4, 20.04.2020, p. 72-91.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - On the optimal 'lockdown' during an epidemic
AU - Gonzalez-Eiras, Martin
AU - Niepelt, Dirk
PY - 2020/4/20
Y1 - 2020/4/20
N2 - 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.
AB - 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.
KW - Faculty of Social Sciences
KW - COVID-19
KW - lockdown
KW - optimal control
M3 - Journal article
VL - 1
SP - 72
EP - 91
JO - Covid Economics
JF - Covid Economics
IS - 7
M1 - 4
ER -
ID: 280289026