COVID-19 Impact and Mitigation Policies: A Didactic Epidemiological-Macroeconomic Model Approach
IMF Working Papers, November 8, 2020
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- COVID-19 Impact and Mitigation Policies: A Didactic Epidemiological-Macroeconomic Model Approach
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Bibliographic details
- Authors: John P. Ansah, Natan P. Epstein, Valeriu Nalban
- Published: November 8, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513560427.001
Overview
- Authors: John P. Ansah, Natan P. Epstein, Valeriu Nalban
- Date: November 8, 2020
- Purpose: Develop an integrated epidemiological-macroeconomic model to analyze interplay between the COVID-19 outbreak and economic activity for capacity building purposes, calibrated for emerging market and developing economies.
- Core objective: Shed light on tradeoffs between saving lives and preserving economic outcomes under various mitigation policies and scenarios.
Model structure and features
- Integrated framework combining:
- A rich epidemiological model.
- An economic block linking disease progression to economic decisions.
- Behavioral linkages:
- Effective contact frequency linked to the current state of disease progression.
- Labor supply decisions linked to the current state of disease progression.
- Behavioral responses introduce multiple feedback channels between health and economic outcomes.
- Extensions and variants:
- Consideration of discovery of treatment or vaccine.
- Possibility of temporary immunity for recovered individuals.
- Multisector framework extension to analyze sectoral allocation effects of the COVID-19 shock.
- Smart mitigation measures illustrated:
- Improved quarantine capacity.
- Targeted labor market restrictions.
- Analysis includes response to a second infection wave.
Key findings and scenarios
- The model highlights tradeoffs between health-related outcomes and economic activity under alternative mitigation policies.
- Smart mitigation measures can alleviate the tradeoffs between saving lives and preserving economic outcomes.
- The framework can capture effects of:
- A second infection wave.
- The discovery of treatment or vaccine.
- Temporary immunity dynamics for recovered individuals.
- Multisector extension allows analysis of sectoral allocation effects of the COVID-19 shock.
Policy implications and recommendations
- Policies that improve quarantine capacity can reduce infection spread while mitigating adverse economic impacts.
- Targeted labor market restrictions are showcased as a mitigation strategy to balance health and economic objectives.
- Consideration of temporary immunity and eventual treatments or vaccines is important for designing medium-term policy responses.
- Multisector analysis is recommended to tailor policies to sector-specific vulnerabilities and to manage allocation effects of the shock.
Subject, keywords, and technical identifiers
- Subject: COVID-19, Health, Labor, Labor markets, Population and demographics
- Keywords: COVID-19, Emerging market and developing economies, Epidemiological model, Global, government-mandated lockdown, infection curve, infection intensity, infection prevalence, infection rate, infection risk, infection wave, Labor markets, latency period, lockdown measure, Macroeconomics, Mitigation policy, Pandemic, viral load, virus transmission rate, wave scenario, WP
- Pages: 28
- Volume: 2020
- DOI: https://doi.org/10.5089/9781513560427.001
- Issue: 233
- Series: Working Paper No. 2020/233
- Stock No: WPIEA2020233
- ISBN: 9781513560427
- ISSN: 1018-5941
IMF Working Paper: "COVID-19 Impact and Mitigation Policies: A Didactic Epidemiological-Macroeconomic Model Approach" by John P. Ansah, Natan P. Epstein, and Valeriu Nalban, November 8, 2020.
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