As part of the Joint webinar series organised by the Department of International Economics and the CEPR, we are pleased to invite you to an online public talk by Professor Gregor Jarosch. He will present his paper
Internal and External Effects of Social Distancing in a Pandemic
coauthored with Maryam Farboodi and Robert Shimer and published in the Covid Economics, Vetted and Real-Time Papers series (CEPR Press, Issue 9, April 2020).
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Abstract: We use a conventional dynamic economic model to integrate individual optimization, equilibrium interactions, and policy analysis into the canonical epidemiological model. Our tractable framework allows us to represent both equilibrium and optimal allocations as a set of di erential equations that can jointly be solved with the epidemiological model in a united fashion. Quantitatively, the laissez-faire equilibrium accounts for the decline in social activity we measure in US micro-data from SafeGraph. Relative to that, we highlight three key features of the optimal policy: it imposes immediate, discontinuous social distancing; it keeps social distancing in place for a long time or until treatment is found; and it is never extremely restrictive, keeping the effective reproduction number mildly above the share of the population susceptible to the disease.