To study the efficacy of the public policy response to the COVID-19 pandemic, we develop a model of the rich interactions between epidemiology and socioeconomic choices. Preferences feature a "fear of death" that lead individuals to reduce their social activity and work time in the face of the pandemic. The aggregate effect of these reductions is to slow the spread of the novel coronavirus. We calibrate the model, including public policies, to developments in Ontario in the spring of 2020. The model fits the epidemiological data quite well, including the second wave starting in late 2020. We find that socioeconomic interventions work well in the short term, resulting in a rapid drop-off in new cases. The long run, however, is governed chiefly by health developments. Welfare cost calculations point to synergies between the health and socioeconomic measures.
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| http://dx.doi.org/10.1111/caje.12564 | DOI Listing |
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