Goenka, Aditya, Liu, Lin and Nguyen, Manh-Hung (2021) Modeling optimal quarantines with waning immunity. TSE Working Paper, n. 21-1206, Toulouse

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This paper studies continuing optimal quarantines (can also be interpreted as lockdowns or self-isolation) in the long run if a disease (Covid-19) is endemic and immunity can fail, i.e. the disease has SIRS dynamics. We model how the disease related mortality aects optimal choices in a dynamic general equilibrium neoclassical growth framework. An extended welfare function that incorporates loss from mortality is used. Without welfare loss from mortality, in the long run even if there is continuing mortality, it is not optimal to impose a quarantine. We characterize the optimal decision of quarantines and how the disease endemic steady state changes with eectiveness of quarantine, productivity of working from home, rate of mortality from the disease, and failure of immunity. We also give the suciency conditions for economic models with SIRS dynamics - a class of models which are non-convex and have endogenous discounting so that no existing results are applicable.

Item Type: Monograph (Working Paper)
Language: English
Date: May 2021
Place of Publication: Toulouse
JEL Classification: C61 - Optimization Techniques; Programming Models; Dynamic Analysis
D50 - General
D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
E13 - Neoclassical
E22 - Capital; Investment (including Inventories); Capacity
I10 - General
I18 - Government Policy; Regulation; Public Health
O41 - One, Two, and Multisector Growth Models
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 06 May 2021 15:35
Last Modified: 17 Oct 2022 13:21
OAI Identifier: oai:tse-fr.eu:125549
URI: https://publications.ut-capitole.fr/id/eprint/43484

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