Internal and External Effects of Social Distancing in a Pandemic

Maryam Farboodi (), Gregor Jarosch () and Robert Shimer
Additional contact information
Maryam Farboodi: Massachusetts Institute of Technology
Gregor Jarosch: Princeton University

No 2020-47, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: We use a conventional dynamic economic model to integrate individual optimization, equilibrium interactions, and policy analysis into the canonical epidemiological model. Our tractable framework allows us to represent both equilibrium and optimal allocations as a set of differential equations that can jointly be solved with the epidemiological model in a unified fashion. Quantitatively, the laissez-faire equilibrium accounts for the decline in social activity we measure in US micro-data from Safe Graph. Relative to that, we highlight three key features of the optimal policy: it imposes immediate, discontinuous social distancing; it keeps social distancing in place for a longtime or until treatment is found; and it is never extremely restrictive, keeping the effective reproduction number mildly above the share of the population susceptible to the disease.

Pages: 36 pages
Date: 2020
New Economics Papers: this item is included in nep-dge and nep-mac
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Citations: View citations in EconPapers (248)

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Related works:
Journal Article: Internal and external effects of social distancing in a pandemic (2021)
Working Paper: Internal and External Effects of Social Distancing in a Pandemic (2021)
Working Paper: Internal and External Effects of Social Distancing in a Pandemic (2020)
Working Paper: Internal and External Effects of Social Distancing in a Pandemic (2020)
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