Stay-at-home orders and second waves: a graphical exposition

Kent A. Smetters ()
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Kent A. Smetters: Wharton and NBER

The Geneva Risk and Insurance Review, 2020, vol. 45, issue 2, No 3, 94-103

Abstract: Abstract Integrated epidemiological-economics models have recently appeared to study optimal government policy, especially stay-at-home orders (mass “quarantines”). But these models are challenging to interpret due to the lack of closed-form solutions. This note provides an intuitive and graphical explanation of optimal quarantine policy. To be optimal, a quarantine requires “the cavalry” (e.g., mass testing, strong therapeutics, or a vaccine) to arrive just in time, not too early or too late. The graphical explanation accommodates numerous extensions, including hospital constraints, sick worker, age differentiation, and learning. The effect of uncertainty about the arrival time of “the cavalry” is also discussed.

Keywords: Virus; Epidemiology; Economics; Quarantine (search for similar items in EconPapers)
JEL-codes: H0 I0 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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DOI: 10.1057/s10713-020-00056-x

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