Susceptible-Infected-Recovered (SIR) Dynamics of COVID-19 and Economic Impact

Alexis Akira Toda

Papers from arXiv.org

Abstract: I estimate the Susceptible-Infected-Recovered (SIR) epidemic model for Coronavirus Disease 2019 (COVID-19). The transmission rate is heterogeneous across countries and far exceeds the recovery rate, which enables a fast spread. In the benchmark model, 28% of the population may be simultaneously infected at the peak, potentially overwhelming the healthcare system. The peak reduces to 6.2% under the optimal mitigation policy that controls the timing and intensity of social distancing. A stylized asset pricing model suggests that the stock price temporarily decreases by 50% in the benchmark case but shows a W-shaped, moderate but longer bear market under the optimal policy.

Date: 2020-03, Revised 2020-03
New Economics Papers: this item is included in nep-hea
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2003.11221

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