Covid-19 contagion, economic activity and business reopening protocols

Alexandre Janiak, Caio Machado and Javier Turen

Journal of Economic Behavior & Organization, 2021, vol. 182, issue C, 264-284

Abstract: This paper studies the impact of sanitary protocols aimed at reducing the contagion by Covid-19 during the production and consumption of goods and services. We augment a heterogeneous SIR model with a two-way feedback between contagion and economic activity, allowing for firm and sector heterogeneity. While protocols are a burden for firms (especially SMEs), they may enhance economic activity by avoiding infections that reduce the labor supply. Using Chilean data, we calibrate the model and assess the impact of recommended firm protocols on contagion and economic activity in the after-lockdown period. Our quantitative results suggest that: (i) A second wave of infections is likely in the absence of protocols; (ii) Protocols targeted at some sectors can reduce deaths while at the same time improving economic conditions; (iii) Protocols applied widely have a negative effect on the economy. We also find that applying strict protocols to a few sectors is generally preferable to applying milder protocols to a larger number of sectors, both in terms of health and economic benefits.

Keywords: Covid-19; Business operating protocols; Sanitary protocols; SIR; Contagion; Economic fluctuations (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268120304753
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Covid-19 contagion, economic activity and business reopening protocols (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:182:y:2021:i:c:p:264-284

DOI: 10.1016/j.jebo.2020.12.016

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().