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Agent-Based Covid economics (ABC): Assessing non-pharmaceutical interventions and macro-stabilization policies
[Optimal Targeted Lockdowns in a Multi-Group SIR Model]

Author

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  • Domenico Delli Gatti
  • Severin Reissl

Abstract

We employ a new macroeconomic–epidemiological agent-based model to evaluate the “lives vs livelihoods” trade-off brought to the fore by coronavirus disease (Covid-19). An infectious disease spreads across the network of agents’ social and economic contacts and feeds back on the economic dimension of the model through various channels such as employment and consumption demand. Under a lockdown (LD) scenario, the model is able to closely reproduce the epidemiological dynamics of the first wave of the Covid-19 epidemic in the Lombardy region of Italy. We find that, in the presence of non-pharmaceutical interventions, there is no trade-off between lives and macroeconomic losses as a stricter LD eventually leads to superior outcomes along both dimensions. We also evaluate the efficacy of various macroeconomic stabilization policies designed to counteract the downturn generated by the epidemic and LD measures. In an agent-based setting we gain additional insights on the way in which such policies impact not only on gross domestic product but also, for instance, on firms’ defaults and relative prices. Liquidity support for firms, a short-time working scheme with compensation for workers, and direct transfer to households stand out as the most effective policy tools.

Suggested Citation

  • Domenico Delli Gatti & Severin Reissl, 2022. "Agent-Based Covid economics (ABC): Assessing non-pharmaceutical interventions and macro-stabilization policies [Optimal Targeted Lockdowns in a Multi-Group SIR Model]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(2), pages 410-447.
    • Handle: RePEc:oup:indcch:v:31:y:2022:i:2:p:410-447.
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    File URL: http://hdl.handle.net/10.1093/icc/dtac002
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    Citations

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    Cited by:

    1. Pichler, Anton & Pangallo, Marco & del Rio-Chanona, R. Maria & Lafond, François & Farmer, J. Doyne, 2022. "Forecasting the propagation of pandemic shocks with a dynamic input-output model," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    2. Turco, Enrico & Bazzana, Davide & Rizzati, Massimiliano & Ciola, Emanuele & Vergalli, Sergio, 2023. "Energy price shocks and stabilization policies in the MATRIX model," Energy Policy, Elsevier, vol. 177(C).
    3. Marco Pangallo & Alberto Aleta & R. Maria del Rio-Chanona & Anton Pichler & David Martín-Corral & Matteo Chinazzi & François Lafond & Marco Ajelli & Esteban Moro & Yamir Moreno & Alessandro Vespignani, 2024. "The unequal effects of the health–economy trade-off during the COVID-19 pandemic," Nature Human Behaviour, Nature, vol. 8(2), pages 264-275, February.
    4. Cars Hommes & Sebastian Poledna, 2023. "Analyzing and forecasting economic crises with an agent-based model of the euro area," Tinbergen Institute Discussion Papers 23-013/II, Tinbergen Institute.
    5. Enrico Turco & Davide Bazzana & Massimiliano Rizzati & Emanuele Ciola & Sergio Vergalli, 2022. "Energy price shocks and stabilization policies in a multi-agent macroeconomic model for the Euro Area," Working Papers 2022.25, Fondazione Eni Enrico Mattei.
    6. Mellacher, Patrick, 2023. "The impact of corona populism: Empirical evidence from Austria and theory," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 113-140.
    7. Ciola, Emanuele & Turco, Enrico & Gurgone, Andrea & Bazzana, Davide & Vergalli, Sergio & Menoncin, Francesco, 2023. "Enter the MATRIX model:a Multi-Agent model for Transition Risks with application to energy shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 146(C).

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