Optimal Management of an Epidemic: Lockdown, Vaccine and Value of Life

Carlos Garriga (), Rodolfo Manuelli and Siddhartha Sanghi

No 2020-031, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: We study a dynamic macro model to capture the trade-off between policies that simultaneously decrease output and the rate of infection transmission. We find that, in many cases, optimal policies require sharp initial decreases in employment followed by a partial liberal- ization that occurs before the peak of the epidemic. The arrival of a vaccine (even if only a small fraction of the population is initially vaccinated) requires a significant relaxation of stay-at-home policies and, in some cases, results in an increase in the speed of infection. The model implies that the monetary value of producing a vaccine is high at the beginning of the epidemic but it decreases rapidly as time passes. We find that the value that society assigns to averting deaths is a major determinant of the optimal policy.

Keywords: health policy; infection transmission; vaccine; epidemic; macro model (search for similar items in EconPapers)
JEL-codes: H75 I10 J11 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-hea
Note: M
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Citations: View citations in EconPapers (25)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Garrig ... agement-epidemic.pdf First version, May 4, 2020. (application/pdf)

Related works:
Journal Article: Optimal management of an epidemic: Lockdown, vaccine and value of life (2022)
Working Paper: Optimal Management of an Epidemic: Lockdown, Vaccine and Value of Life (2022)
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