COVID-19: Erroneous Modelling and Its Policy Implications

Arbeitspapier

Research in Economics on COVID-19 posits an economy subject to disease dynamics, which are often seriously misspecified in terms of speed and scale. Using a social planner problem, we show that such misspecifications lead to misguided policy. Erroneously characterizing a relatively slow-moving disease engenders dramatically higher death tolls and excessive output loss relative to the correct benchmark. We delineate the latter, employing epidemiological evidence on the timescales of COVID-19 transmission and clinical progression. The resulting sound model is simple, transparent, and novel in Economics.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 14202

Classification and Topics

• Classification: Wirtschaft ; Policy Objectives; Policy Designs and Consistency; Policy Coordination ; Studies of Particular Policy Episodes ; Crisis Management ; Value of Life; Forgone Income
• Subject: optimal policy ; public health ; GDP loss ; COVID-19 ; disease dynamics and scale ; misspecification

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bar-On, Yinon ; Baron, Tatiana ; Cornfeld, Ofer ; Milo, Ron ; Yashiv, Eran
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/236233
• Last update: 10.03.2025, 11:42 AM CET