Working Paper

How To Go Viral: A COVID-19 Model with Endogenously Time-Varying Parameters

Abstract: This paper estimates a panel model with endogenously time-varying parameters for COVID-19 cases and deaths in U.S. states. The functional form for infections incorporates important features of epidemiological models but is flexibly parameterized to capture different trajectories of the pandemic. Daily deaths are modeled as a spike-and-slab regression on lagged cases. The paper's Bayesian estimation reveals that social distancing and testing have significant effects on the parameters. For example, a 10 percentage point increase in the positive test rate is associated with a 2 percentage point increase in the death rate among reported cases. The model forecasts perform well, even relative to models from epidemiology and statistics.

Keywords: Bayesian Estimation; Panel; Time-Varying Parameters;

JEL Classification: C32; C51;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Working Paper

Publication Date: 2020-08-21

Number: 20-10