Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236233 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14202
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
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.
Subjects: 
optimal policy
public health
GDP loss
COVID-19
disease dynamics and scale
misspecification
JEL: 
E61
E65
H12
J17
Document Type: 
Working Paper

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