Search Results
Working Paper
Optimal Management of an Epidemic: Lockdown, Vaccine and Value of Life
This paper analyzes the optimal management of a pandemic (stay-at-home and vaccination policies) in a dynamic model. The optimal lockdown policies respond to the spread of the virus with significant restrictions to employment, followed by partial loosening before the peak of the epidemic. Upon the availability of a vaccine, the optimal vaccination policy has an almost bang-bang property, despite the loss of immunity of the vaccinated: vaccinate at the highest possible rate, and then rapidly converge to the steady state. The model illustrates interesting trade-offs as it implies that lower ...
Working Paper
Technology adoption, mortality and population dynamics
We develop a quantitative theory of mortality trends and population dynamics. Our theory emphasizes individual choices on costly adoption of healthy technologies and diffusion of knowledge about infections as a key channel for reducing mortality. Our theory is consistent with three observations on mortality: (i) The cross-country correlation between levels of mortality and income is negative; (ii) mortality in poor countries has converged to that of rich countries despite no convergence in income; and (iii) economic growth is not a prerequisite for mortality to decline. We calibrate our model ...
Working Paper
Technology Adoption, Mortality, and Population Dynamics
We develop a quantitative theory of mortality and population dynamics. We emphasize individuals' decisions to reduce their mortality by adopting better health technology. Adoption becomes cheaper as more individuals use better technology. It also confers a dynamic externality by increasing the future number of individuals who use the better technology. Our model generates a diffusion curve whose shape dictates the pace of mortality reduction. The model explains historical trends in mortality rates and life expectancies at various ages and population dynamics in Western Europe. Unlike ...
Working Paper
The Distributional Effects of COVID-19 and Optimal Mitigation Policies
This paper develops a quantitative heterogeneous agent-life cycle model with a fully integrated epidemiological model in which economic decisions affect the spread of COVID-19 and vice versa. The calibrated model is used to study the distributional consequences and effectiveness of mitigation policies such as a stay-at-home subsidy and a stay-at-home order. First, the stay-at-home subsidy is preferred because it reduces deaths by more and output by less, leading to a larger average welfare gain that benefits all individuals. Second, Pareto-improving mitigation policies can reduce deaths by ...
Working Paper
Technology adoption, mortality, and population dynamics
We develop a quantitative theory of mortality and population dynamics. We emphasize individuals' decisions to reduce their mortality by adopting better health technology. Adoption becomes cheaper as more individuals use better technology. It also confers a dynamic externality by increasing the future number of individuals who use the better technology. Our model generates a diffusion curve whose shape dictates the pace of mortality reduction. The model explains historical trends in mortality rates and life expectancies at various ages and population dynamics in Western Europe. Unlike ...
Working Paper
Technology Adoption, Mortality, and Population Dynamics
We develop a quantitative theory of mortality trends and population dynamics. We emphasize diseases as causes of death and individuals' decisions to reduce their mortality by adopting, at some cost, a modern health-related technology. Adoption confers a dynamic externality: Adoption becomes cheaper as more individuals acquire the modern technology. Our model generates an S-shaped diffusion curve, whose shape dictates the pace of mortality reduction in each country. We use the model to explain the gradual decline of mortality in Western Europe in the 19th and 20th centuries as well as the ...
Discussion Paper
Does China’s Zero Covid Strategy Mean Zero Economic Growth?
The Chinese government has followed a “zero covid strategy” (ZCS) ever since the world’s first COVID-19 lockdowns ended in China around late March and early April of 2020. While this strategy has been effective at maintaining low infection levels and robust manufacturing and export activity, its viability is being severely strained by the spread of increasingly infectious coronavirus variants. As a result, there now appears to be a fundamental incompatibility between the ZCS and the government’s economic growth objectives.
Working Paper
The Distributional Effects of COVID-19 and Optimal Mitigation Policies
This paper develops a quantitative heterogeneous agent–life cycle model with a fully integrated epidemiological model in which economic decisions affect the spread of COVID-19 and vice versa. The calibrated model is used to study the distributional consequences and effectiveness of mitigation policies such as a stay-at-home subsidy and a stay-at-home order. First, the stay-at-home subsidy is preferred because it reduces deaths by more and output by less, leading to a larger average welfare gain that benefits all individuals. Second, Pareto-improving mitigation policies can reduce deaths by ...
Working Paper
The Distributional Effects of COVID-19 and Optimal Mitigation Policies
This paper develops a quantitative heterogeneous agent–life cycle model with a fully integrated epidemiological model in which economic decisions affect the spread of COVID-19 and, conversely, the virus affects economic decisions. The calibrated model is used to study the distributional consequences and effectiveness of two mitigation policies: a stay-at-home subsidy that subsidizes reduced hours worked and a stay-at-home order that limits outside hours. First, the stay-at-home subsidy is preferred because it reduces deaths by more and output by less, leading to a larger average welfare ...
Working Paper
Technology Adoption, Mortality, and Population Dynamics
We develop a quantitative theory of mortality and population dynamics. We emphasize individuals' decisions to reduce their mortality by adopting better health technology. Adoption confers a dynamic externality: Adoption becomes cheaper as more individuals use better technology. Our model generates a diffusion curve, whose shape dictates the pace of mortality reduction. The model explains historical trends in mortality rates and life expectancies at various ages, and population dynamics in Western Europe. Unlike Malthusian theories based solely on income, ours is consistent with the observed ...