Social Distancing, Vaccination and the Paradoxical Optimality of an Endemic Equilibrium

Andrew Abel and Stavros Panageas

No 27742, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze the impact of public health policy on the spread of a disease using a version of the SIR model that includes vital statistics, waning immunity, and vaccination. This model is rich enough to accommodate endemic steady states and disease-free steady states. We choose social distancing and vaccines to maximize an objective function that penalizes lost output resulting from social distancing, deaths resulting from the disease, and the cost of vaccination. Surprisingly, even though a disease-free equilibrium is attainable, optimal policy leads to an endemic steady state, though with a small number of deaths and negligible loss of output.

JEL-codes: C61 E61 I18 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-mac
Note: AP EFG EH ME
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Citations: View citations in EconPapers (11)

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