Spatial-SIR with Network Structure and Behavior: Lockdown Rules and the Lucas Critique

Alberto Bisin and Andrea Moro

No 28932, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We introduce a model of the diffusion of an epidemic with demographically heterogeneous agents interacting socially on a spatially structured network. Contagion-risk averse agents respond behaviorally to the diffusion of the infections by limiting their social interactions. Firms also respond by allowing employees to work remotely, depending on their productivity. The spatial structure induces local herd immunities along sociodemographic dimensions, which significantly affect the dynamics of infections. We study several non-pharmaceutical interventions; e.g., i) lockdown rules, which set thresholds on the spread of the infection for the closing and reopening of economic activities; and ii) selective lockdowns, which restrict social interactions by location (in the network) and by the demographic characteristics of the agents. Substantiating a “Lucas critique” argument, we assess the cost of naive discretionary policies ignoring agents and firms’ behavioral responses.

JEL-codes: I18 R10 (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-net and nep-ure
Note: EH PE POL
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Citations: View citations in EconPapers (10)

Published as Alberto Bisin & Andrea Moro, 2022. "Spatial‐SIR with network structure and behavior: Lockdown rules and the Lucas critique," Journal of Economic Behavior & Organization, vol 198, pages 370-388.

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Journal Article: Spatial‐SIR with network structure and behavior: Lockdown rules and the Lucas critique (2022)
Working Paper: Spatial-SIR with Network Structure and Behavior: Lockdown Rules and the Lucas Critique (2022)
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