Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228896
Authors: 
Gonzalez-Eiras, Martín
Niepelt, Dirk
Year of Publication: 
2020
Series/Report no.: 
Discussion Papers No. 20-08
Publisher: 
University of Bern, Department of Economics, Bern
Abstract: 
We embed a lockdown choice in a simplified epidemiological model and derive formulas for the optimal lockdown intensity and duration. The optimal policy re- ects the rate of time preference, epidemiological factors, the hazard rate of vaccine discovery, learning effects in the health care sector, and the severity of output losses due to a lockdown. In our baseline specification a Covid-19 shock as currently expe- rienced by the US optimally triggers a reduction in economic activity by two thirds, for about 50 days, or approximately 9:5 percent of annual GDP.
Subjects: 
Epidemic
pandemic
lockdown
social distancing
production shortfall
health care system
Covid-19
SIR model
logistic model
JEL: 
I18
Document Type: 
Working Paper

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