Goenka, Aditya, Liu, Lin and Nguyen, Manh-Hung (2022) Modelling optimal lockdowns with waning immunity. Economic Theory.

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Identification Number : 10.1007/s00199-022-01468-8


This paper studies continuing optimal lockdowns (can also be interpreted as quaran-tines or self-isolation) in the long run if a disease (Covid-19) is endemic and immunity can fail, that is, the disease has SIRS dynamics. We model how disease related mortality affects the optimal choices in a dynamic general equilibrium neoclassical growth framework. An extended welfare function that incorporates loss from mortality is used. In a disease endemic steady state, without this welfare loss even if there is continu-ing mortality, it is not optimal to impose even a partial lockdown. We characterize how the optimal restriction and equilibrium outcomes vary with the effectiveness of the lockdown, the productivity of working from home, the rate of mortality from the disease, and failure of immunity. We provide the sufficiency conditions for economic models with SIRS dynamics with disease related mortality – a class of models which are non-convex and have endogenous discounting so that no existing results are applicable.

Item Type: Article
Language: English
Date: 29 November 2022
Refereed: Yes
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)
Site: UT1
Date Deposited: 27 Feb 2023 15:51
Last Modified: 07 Jun 2024 08:11
OAI Identifier: oai:tse-fr.eu:127434
URI: https://publications.ut-capitole.fr/id/eprint/46357

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