How Long Should the COVID-19 Lockdown Continue?

Caulkins, J., Grass, D., Feichtinger, G., Hartl, R., Kort, P.M., Prskawetz, A., Seidl, A., & Wrzazcek, S. (2020). How Long Should the COVID-19 Lockdown Continue? IIASA Working Paper. Laxenburg, Austria: WP-20-010

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Abstract

Nations are struggling to decide when to end COVID-19 inspired lockdowns, with sharply divergent views between those arguing for a resumption of economic activity and those arguing for continuing the lockdown. We examine this choice within a simple optimal dynamic control model that encompasses both health and economic outcomes, and pays particular attention to when need for care exceeds hospital capacity. The model shows that very di_erent strategies can perform similarly well and even both be optimal for the same relative valuation on work and life because of the presence of a so-called Skiba threshold. Qualitatively the alternate strategies correspond to trying to essentially eradicate the virus or merely to atten the curve so fewer people urgently need healthcare when hospitals are already _lled to capacity.

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