Assessing Targeted Containment Policies to Fight COVID-19

Checo Ariadne (), Francesco Grigoli () and Mota Jose M. ()
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Checo Ariadne: Central Bank of the Dominican Republic, Santo Domingo, Dominican Republic
Mota Jose M.: Economics, University of Houston, Houston, USA
Authors registered in the RePEc Author Service: Jose Manuel Mota Aquino ()

The B.E. Journal of Macroeconomics, 2022, vol. 22, issue 1, 159-196

Abstract: The large economic costs of full-blown lockdowns in response to COVID-19 outbreaks, coupled with heterogeneous mortality rates across age groups, led to question non-discriminatory containment measures. In this paper we provide an assessment of the targeted approach to containment. We propose a SIR-macro model that allows for heterogeneous agents in terms of mortality rates and contact rates, and in which the government optimally bans people from working. We find that under a targeted policy, the optimal containment reaches a larger portion of the population than under a blanket policy and is held in place for longer. Compared to a blanket policy, a targeted approach results in a smaller death count. Yet, it is not a panacea: the recession is larger under such approach as the containment policy applies to a larger fraction of people, remains in place for longer, and herd immunity is achieved later. Moreover, we find that increased interactions between low- and high-risk individuals effectively reduce the benefits of a targeted approach to containment.

Keywords: optimal containment policies; COVID-19; heterogeneous agents; mortality rate; voluntary social distancing (search for similar items in EconPapers)
JEL-codes: E10 H00 I10 (search for similar items in EconPapers)
Date: 2022
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Working Paper: Assessing Targeted Containment Policies to Fight COVID-19 (2021)
Working Paper: Assessing Targeted Containment Policies to Fight COVID-19 (2020)
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DOI: 10.1515/bejm-2020-0260

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