The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Portrait of Tommy Andersson. Photo.

Tommy Andersson

Professor

Portrait of Tommy Andersson. Photo.

Optimal Trade-Off between Economic Activity and Health during an Epidemic

Author

  • Tommy Andersson
  • Albin Erlanson
  • Daniel Spiro
  • Robert Östling

Summary, in English

This paper considers a simple model where a social planner can influence the spread-intensity of an infection wave, and, consequently, also the economic activity and population health, through a single parameter. Population health is assumed to only be negatively affected when the number of simultaneously infected exceeds health care capacity. The main finding is that if (i) the planner attaches a positive weight on economic activity and (ii) it is more harmful for the economy to be locked down for longer than shorter time periods, then the optimal policy is to (weakly) exceed health care capacity at some time.

Department/s

  • Department of Economics

Publishing year

2020

Language

English

Publication/Series

Working Papers

Issue

2020:8

Document type

Working paper

Topic

  • Economics

Keywords

  • Covid-19 pandemic
  • SI-model
  • economic activity
  • health
  • optimal policy
  • E23
  • E27
  • E60
  • E65

Status

Published