Responding to COVID-19: A Note
Abstract: We consider several epidemiological simulations of the COVID-19 pandemic using the textbook SIR model and discuss the basic implications of these results for crafting an adequate response to the ensuing economic crisis. Our simulations are meant to be illustrative of the ﬁndings reported in the epidemiological literature using more sophisticated models (e.g., Ferguson et al. (2020)). The key observation we stress is that moderating the epidemiological response of social distancing according to the models may come at a steep price of extending the duration of the pandemic and hence the time these measures need to stay in place to be eﬀective. We caution against ignoring this tradeoﬀ as well as the fact that the timeline of the pandemic remains uncertain at this point. Consistent with the prudent advice of hoping for the best but preparing for the worst, we argue that a comprehensive economic response should address the question of how to safely “hibernate” the national economy for a ﬂexible time period. We provide a discussion of basic policy guidelines and highlight the key policy challenges.
File(s): File format is application/pdf https://www.philadelphiafed.org/-/media/frbp/assets/working-papers/2020/wp20-14.pdf
Provider: Federal Reserve Bank of Philadelphia
Part of Series: Working Papers
Publication Date: 2020-04-14