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 Christopher Pissarides. He will present his paper

Modelling contacts and transitions in the SIR epidemics model

coauthored with Pietro Garibaldi and Espen R. Moen and published in the Covid  Economics,  Vetted  and  Real-Time Papers series (CEPR Press, Issue 5, April 2020).

Register for this event and join live.

Abstract: Since  the  outbreak  of  the  Covid-19  pandemic  economists  have  turned  to  the  SIR  model  and  its  subsequent  variants  for  the  study  of  the  pandemic's  economic  impact.  But  the  SIR  model  is  lacking  the  optimising  behaviour  of  economic  models,  in  which  agents  can  inuence  future  transitions  with  their  present  actions.  We  borrow  ideas  and  modelling  techniques  from  the  Mortensen-Pissarides (1994) search and matching model and show that there is  a  well-defined  solution  in  line  with  the  original  claims  of  Kermack  and  McKendrick  (1927)  but  in  which  incentives  play  a  role  in  determining  the  transitions. There are also externalities that justify government intervention in the form of imposing more restrictions on actions outside the home than a decentralised equilibrium would yield.

The event will be moderated by Charles Wyplosz.