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Road to recovery: Managing an epidemic

Author

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  • Loertscher, Simon
  • Muir, Ellen V.

Abstract

Without widespread immunization, the road to recovery from the current COVID-19 lockdowns will optimally follow a path that finds the difficult balance between the social and economic benefits of liberty and the toll from the disease. We provide an approach that combines epidemiology and economic models, taking as given that the maximum capacity of the healthcare system imposes a constraint that must not be exceeded. Treating the transmission rate as a decreasing function of the severity of the lockdown, we first determine the minimal lockdown that satisfies this constraint using an epidemiology model with a homogeneous population to predict future demand for healthcare. Allowing for a heterogeneous population, we then derive the optimal lockdown policy under the assumption of homogeneous mixing and show that it is characterized by a bang–bang solution. Possibilities such as the capacity of the healthcare system increasing or a vaccine arriving at some point in the future do not substantively impact the dynamically optimal policy until such an event actually occurs.

Suggested Citation

  • Loertscher, Simon & Muir, Ellen V., 2021. "Road to recovery: Managing an epidemic," Journal of Mathematical Economics, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:mateco:v:93:y:2021:i:c:s0304406821000203
    DOI: 10.1016/j.jmateco.2021.102482
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Miclo, Laurent & Spiro, Daniel & Weibull, Jörgen, 2022. "Optimal epidemic suppression under an ICU constraint: An analytical solution," Journal of Mathematical Economics, Elsevier, vol. 101(C).
    2. Natali Hritonenko & Yuri Yatsenko, 2024. "Analysis of optimal lockdown in integral economic–epidemic model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 77(1), pages 235-259, February.
    3. Raouf Boucekkine & Shankha Chakraborty & Aditya Goenka & Lin Liu, 2024. "A Brief Tour of Economic Epidemiology Modelling," LIDAM Discussion Papers IRES 2024002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Jacek Rothert, 2021. "Optimal federal transfers during uncoordinated response to a pandemic," GRAPE Working Papers 58, GRAPE Group for Research in Applied Economics.
    5. Salvatore Federico & Giorgio Ferrari & Maria-Laura Torrente, 2024. "Optimal vaccination in a SIRS epidemic model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 77(1), pages 49-74, February.
    6. Hubert Kempf & stéphane Rossignol, 2023. "Lockdown policies and the dynamics of a pandemic: foresight, rebounds and optimality," Documents de recherche 23-06, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    7. Jacek Rothert, 2022. "Optimal federal transfers during uncoordinated response to a pandemic," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(5), pages 1124-1153, October.
    8. Fatemeh Mirsaeedi & Mohammad Sheikhalishahi & Mehrdad Mohammadi & Amir Pirayesh & Dmitry Ivanov, 2026. "Compartmental models in epidemiology: bridging the gap with operations research for enhanced epidemic control," Annals of Operations Research, Springer, vol. 357(2), pages 1021-1078, February.
    9. Boucekkine, Raouf & Chakraborty, Shankha & Goenka, Aditya & Liu, Lin, 2024. "Economic epidemiological modelling: A progress report," Journal of Mathematical Economics, Elsevier, vol. 113(C).
    10. Hongtao Li & Taisuke Nakata & Hiroki Sakamoto & Hiroyuki Uneya, 2026. "Lockdown Policy Rules with a Hospital Capacity Constraint," Working Papers e223, Tokyo Center for Economic Research.
    11. Lin William Cong & Ke Tang & Bing Wang & Jingyuan Wang, 2021. "An AI-assisted Economic Model of Endogenous Mobility and Infectious Diseases: The Case of COVID-19 in the United States," Papers 2109.10009, arXiv.org.

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