Optimal Trade-Off between Economic Activity and Health during an Epidemic

Arbeitspapier

This paper considers a simple model where a social planner can influence the spread-intensity of an infection wave, and, consequently, also the economic activity and population health, through a single parameter. Population health is assumed to only be negatively affected when the number of simultaneously infected exceeds health care capacity. The main finding is that if (i) the planner attaches a positive weight on economic activity and (ii) it is more harmful for the economy to be locked down for longer than shorter time periods, then the optimal policy is to (weakly) exceed health care capacity at some time.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2020:8

Classification and Topics

• Classification: Wirtschaft ; Macroeconomics: Production ; Macroeconomics: Consumption, Saving, Production, Employment, and Investment: Forecasting and Simulation: Models and Applications ; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General ; Studies of Particular Policy Episodes
• Subject: Covid-19 pandemic ; SI-model ; economic activity ; health ; optimal policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Andersson, Tommy ; Erlanson, Albin ; Spiro, Daniel ; Östling, Robert
• Event: Veröffentlichung
• (who): Lund University, School of Economics and Management, Department of Economics
• (where): Lund
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/260300
• Last update: 10.03.2025, 11:41 AM CET