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We extend the canonical epidemiology model to study the interaction between economic decisions and epidemics. Our model implies that people ís decision to cut back on consumption and work reduces the severity of the epidemic, as measured by total deaths. These decisions exacerbate the size of the re...
|a The macroeconomics of epidemics /
|c Martin S. Eichenbaum, Sergio Rebelo, Mathias Trabandt.
|h [recurso electrónico]
260
|a Cambridge, Mass. :
|b National Bureau of Economic Research,
|c 2020
300
|a 1 recurso en línea (46 p.)
490
0
|a NBER working paper series ;
|v no. 26882
504
|a Bibliografía: p. 29-31.
520
3
|a We extend the canonical epidemiology model to study the interaction between economic decisions and epidemics. Our model implies that people ís decision to cut back on consumption and work reduces the severity of the epidemic, as measured by total deaths. These decisions exacerbate the size of the recession caused by the epidemic. The competitive equilibrium is not socially optimal because infected people do not fully internalize the effect of their economic decisions on the spread of the virus. In our benchmark model, the best simple containment policy increases the severity of the recession but saves roughly half a million lives in the U.S.
