Modelling optimal lockdowns with waning immunity

Goenka, Aditya, Liu, Lin ORCID: 0000-0002-8222-7625 and Nguyen, Manh-Hung (2022) Modelling optimal lockdowns with waning immunity. ECONOMIC THEORY, 77 (1-2). pp. 1-38.

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Official URL: http://dx.doi.org/10.1007/s00199-022-01468-8

Abstract

This paper studies continuing optimal lockdowns (can also be interpreted as quarantines 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 continuing 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 <i>SIRS</i> 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
Uncontrolled Keywords:	Covid-19, SIRS model, Mortality, Lockdown, Quarantine, Sufficiency conditions, Self-isolation, Infectious diseases, NPI, Endogenous discounting
Depositing User:	Symplectic Admin
Date Deposited:	12 Dec 2022 11:05
Last Modified:	21 Jan 2024 09:32
DOI:	10.1007/s00199-022-01468-8
Open Access URL:	https://doi.org/10.1007/s00199-022-01468-8
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3166610