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Optimal social distancing and the economics of uncertain vaccine arrival

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  • Terrence Iverson
  • Larry Karp
  • Alessandro Peri

Abstract

We analytically identify two mechanisms that explain why a later arrival time for a pandemic‐ending vaccine has an ambiguous effect on optimal social‐distancing policy. We assess the net effect of these channels using a quantitative model solved for over a thousand parameter combinations. Optimal policy and welfare comparisons are both highly sensitive to beliefs about vaccine arrival. A policy of moving quickly to herd immunity by requiring social distancing for only the most vulnerable might be loosely justified for expected vaccine arrivals over 2 years, but becomes catastrophic if the expected arrival is within a year.

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  • Terrence Iverson & Larry Karp & Alessandro Peri, 2022. "Optimal social distancing and the economics of uncertain vaccine arrival," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(5), pages 1071-1100, October.
    • Handle: RePEc:bla:jpbect:v:24:y:2022:i:5:p:1071-1100
    DOI: 10.1111/jpet.12606
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    1. Rabah Amir & Raouf Boucekkine, 2022. "Introduction to the special issue on new insights into economic epidemiology: Theory and policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(5), pages 861-872, October.

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