A Simple Planning Problem for COVID-19 Lock-down, Testing, and Tracing
American Economic Review: Insights
vol. 3,
no. 3, September 2021
(pp. 367-82)
Abstract
We study the optimal lock-down for a planner who controls the fatalities of COVID-19 while minimizing the output costs of the lock-down. The policy prescribes a severe lock-down beginning a few weeks after the outbreak, covering almost 50 percent of the population after a month, with a total duration shy of 4 months. The intensity of the optimal lock-down depends on the gradient of the fatality rate with respect to the infected and the availability of antibody testing, which yields a welfare gain of 2 percent of GDP. We also study test-tracing-quarantine, which we show to be complementary to lock-down.Citation
Alvarez, Fernando, David Argente, and Francesco Lippi. 2021. "A Simple Planning Problem for COVID-19 Lock-down, Testing, and Tracing." American Economic Review: Insights, 3 (3): 367-82. DOI: 10.1257/aeri.20200201Additional Materials
JEL Classification
- E23 Macroeconomics: Production
- I12 Health Behavior
- I15 Health and Economic Development
- I18 Health: Government Policy; Regulation; Public Health