Mortality containment vs. Economics Opening: Optimal policies in a SEIARD model

Andrea Aspri, Elena Beretta, Alberto Gandolfi and Etienne Wasmer
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Andrea Aspri: RICAM - Johann Radon Institute for Computational and Applied Mathematics - OeAW - Austrian Academy of Sciences
Elena Beretta: New York University [Abu Dhabi] - NYU - NYU System
Alberto Gandolfi: POLIMI - Politecnico di Milano [Milan]

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Abstract: We extend the classic approach (SIR) to a SEAIRD model with policy controls. A social planner's objective reflects the trade-off between mortality reduction and GDP, featuring its perception of the value of statistical life (PVSL). We introduce realistic and drastic limitations to the control available to it. Within this setup, we explore the results of various control policies. We notably describe the joint dynamics of infection and economy in different contexts with unique or multiple confinement episodes. Compared to other approaches, our contributions are: (i) to restrict the class of functions accessible to the social planner, and in particular to impose that they remain constant over some fixed periods; (ii) to impose implementation frictions, e.g. a lag in their implementation; (iii) to prove the existence of optimal strategies within this set of possible controls; iv) to exhibit a sudden change in optimal policy as the statistical value of life is raised, from laissez-faire to a sizeable lockdown level, indicating a possible reason for conflicting policy proposals.

Keywords: SIR; Statistical value of life; Optimal control; Public policy evaluation (search for similar items in EconPapers)
Date: 2021-03
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Citations: View citations in EconPapers (10)

Published in Journal of Mathematical Economics, 2021, 93, pp.102490. ⟨10.1016/j.jmateco.2021.102490⟩

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Related works:
Journal Article: Mortality containment vs. Economics Opening: Optimal policies in a SEIARD model (2021)
Working Paper: Mortality containment vs. Economics Opening: Optimal policies in a SEIARD model (2021)
Working Paper: Mortality containment vs. economics opening: optimal policies in a SEIARD model (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03950294

DOI: 10.1016/j.jmateco.2021.102490

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