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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 ...
Report
Pandemic Lockdown: The Role of Government Commitment
This paper studies lockdown policy in a dynamic economy without government commitment. Lockdown imposes a cap on labor supply, which improves health prospects at the cost of economic output and consumption. A government would like to commit to the extent of future lockdowns in order to guarantee an economic outlook that supports efficient levels of investment into intermediate inputs. However, such a commitment is not credible, since investments are sunk at the time when the government chooses a lockdown. As a result, lockdown under lack of commitment deviates from the optimal policy. Rules ...
Journal Article
How Has the Current Lockdown in China Affected the Global Supply Chain?
The recent lockdown in China is expected to exacerbate disruptions in the global supply chain. Using high-frequency data, I show that supply chain disruptions from the current lockdown are likely to be less severe than those from the lockdown in 2020. However, highly transmissible COVID-19 variants continue to present risks, and supply chain disruptions could intensify if the current lockdown is extended or applied to other regions of China.