COVID-19: Erroneous Modelling and Its Policy Implications

Yinon Bar-On, Tatiana Baron, Ofer Cornfeld, Ron Milo and Eran Yashiv ()
Additional contact information
Yinon Bar-On: Weizmann Institute of Science
Ron Milo: Weizmann Institute of Science
Eran Yashiv: Tel Aviv University

No 14202, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Research in Economics on COVID-19 posits an economy subject to disease dynamics, which are often seriously misspecified in terms of speed and scale. Using a social planner problem, we show that such misspecifications lead to misguided policy. Erroneously characterizing a relatively slow-moving disease engenders dramatically higher death tolls and excessive output loss relative to the correct benchmark. We delineate the latter, employing epidemiological evidence on the timescales of COVID-19 transmission and clinical progression. The resulting sound model is simple, transparent, and novel in Economics.

Keywords: optimal policy; public health; GDP loss; COVID-19; disease dynamics and scale; misspecification (search for similar items in EconPapers)
JEL-codes: E61 E65 H12 J17 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2021-03
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 (1)

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Related works:
Working Paper: COVID19: Erroneous Modelling and Its Policy Implications (2020)
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