Optimal Trade-Off between Economic Activity and Health during an Epidemic

Tommy Andersson, Albin Erlanson (), Daniel Spiro and Robert Östling

No 2020:8, Working Papers from Lund University, Department of Economics

Abstract: Abstract: This paper considers a simple model where a social planner can influence the spread-intensity of an infection wave, and, consequently, also the economic activity and population health, through a single parameter. Population health is assumed to only be negatively affected when the number of simultaneously infected exceeds health care capacity. The main finding is that 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.

Keywords: Covid-19 pandemic; SI-model; economic activity; health; optimal policy (search for similar items in EconPapers)
JEL-codes: E23 E27 E60 E65 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2020-05-15
New Economics Papers: this item is included in nep-hea and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Optimal Trade-Off Between Economic Activity and Health During an Epidemic (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:lunewp:2020_008

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