The political economy of epidemic management

David McAdams () and Troy Day ()
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David McAdams: Duke University
Troy Day: Queens University

Review of Economic Design, 2025, vol. 29, issue 1, No 5, 115-148

Abstract: Abstract During an infectious-disease epidemic, a political leader imposes “stay-at-home orders” (limiting activity) or “go-out orders” (mandating activity) whenever preferred by the majority of the citizenry over the no-intervention status quo. We characterize the resulting equilibrium epidemic trajectory in an economic-epidemiological model that allows for asymptomatic infection and social-economic complementarities of activity, assuming that citizens are myopic optimizers. We find that the qualitative features of equilibrium policy dynamics hinge critically on whether the pathogen is transmitted before or after infected people have developed symptoms. If transmission only occurs symptomatically, then the leader never imposes stay-at-home orders on the healthy but may impose go-out orders during some phases of the epidemic. However, if transmission occurs asymptomatically, the leader never imposes go-out orders on the healthy.

Keywords: Epidemic management; Asymptomatic transmission; Stay-at-home orders; Go-out orders; Yo–yo dynamics (search for similar items in EconPapers)
JEL-codes: C73 I12 I18 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10058-024-00357-x

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