The macroeconomics of age-varying epidemics
(2023) In European Economic Review 151.- Abstract
We incorporate age-specific socio-economic interactions in a SIR macroeconomic model to study the role of demographic factors for the COVID-19 epidemic evolution, its macroeconomic effects and possible containment measures. We capture the endogenous response of rational individuals who choose to reduce inter- and intra-generational social interactions, consumption- and labor-related personal exposure to the virus, while not internalizing the impact of their actions on others. We find that social distancing measures targeted to the elderly (who face higher mortality risk and are not part of the labor force) are best suited to save lives and mitigate output losses. The optimal economic shutdown generates small gains in terms of lives... (More)
We incorporate age-specific socio-economic interactions in a SIR macroeconomic model to study the role of demographic factors for the COVID-19 epidemic evolution, its macroeconomic effects and possible containment measures. We capture the endogenous response of rational individuals who choose to reduce inter- and intra-generational social interactions, consumption- and labor-related personal exposure to the virus, while not internalizing the impact of their actions on others. We find that social distancing measures targeted to the elderly (who face higher mortality risk and are not part of the labor force) are best suited to save lives and mitigate output losses. The optimal economic shutdown generates small gains in terms of lives saved and large output losses, for any given type of social distancing. These results are confirmed by calibrating the model to match real epidemic and economic data in the context of a scenario exercise.
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- author
- Giagheddu, Marta LU and Papetti, Andrea
- organization
- publishing date
- 2023-01
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Age differences, Containment policies, COVID-19, Demographics, Epidemic, Recessions, SIR macro model, Vaccine
- in
- European Economic Review
- volume
- 151
- article number
- 104346
- publisher
- Elsevier
- external identifiers
-
- scopus:85145934270
- pmid:36447836
- ISSN
- 0014-2921
- DOI
- 10.1016/j.euroecorev.2022.104346
- language
- English
- LU publication?
- yes
- id
- 081cd9ef-f70f-4bac-996a-f33bd482087e
- date added to LUP
- 2023-02-17 10:00:15
- date last changed
- 2024-06-25 01:47:17
@article{081cd9ef-f70f-4bac-996a-f33bd482087e,
abstract = {{<p>We incorporate age-specific socio-economic interactions in a SIR macroeconomic model to study the role of demographic factors for the COVID-19 epidemic evolution, its macroeconomic effects and possible containment measures. We capture the endogenous response of rational individuals who choose to reduce inter- and intra-generational social interactions, consumption- and labor-related personal exposure to the virus, while not internalizing the impact of their actions on others. We find that social distancing measures targeted to the elderly (who face higher mortality risk and are not part of the labor force) are best suited to save lives and mitigate output losses. The optimal economic shutdown generates small gains in terms of lives saved and large output losses, for any given type of social distancing. These results are confirmed by calibrating the model to match real epidemic and economic data in the context of a scenario exercise.</p>}},
author = {{Giagheddu, Marta and Papetti, Andrea}},
issn = {{0014-2921}},
keywords = {{Age differences; Containment policies; COVID-19; Demographics; Epidemic; Recessions; SIR macro model; Vaccine}},
language = {{eng}},
publisher = {{Elsevier}},
series = {{European Economic Review}},
title = {{The macroeconomics of age-varying epidemics}},
url = {{http://dx.doi.org/10.1016/j.euroecorev.2022.104346}},
doi = {{10.1016/j.euroecorev.2022.104346}},
volume = {{151}},
year = {{2023}},
}