Working Paper: CEPR ID: DP15107
Authors: Yinon Baron; Tatiana Baron; Ofer Cornfeld; Ron Milo; Eran Yashiv
Abstract: Rapidly expanding research on COVID19 in Economics typically posits an economy subject to a model of epidemiological dynamics, which is at the core of the analysis. We place this model on the foundations of an epidemiological analysis of the SARS-CoV-2 virus transmission timescales.The contribution is twofold. First, we formulate a full model with epidemiologically-based and clinically-based parameterization. The model features two blocks: an infection transmission block, described by the SEIR-Erlang model, and a clinical block, characterizing the development of symptoms, hospitalization, ICU admission, and recovery or death. The latter is important for the analysis of dynamics of the public health system.Second, we show that there is often serious mis-specification of the model, erroneously characterizing a relatively slow-moving disease, thereby distorting the policymaker decisions towards less severe, delayed intervention. Moreover, the scale of the disease is under-estimated. We also discuss misguided modelling of lockdown policies.
Keywords: The economy and epidemiological dynamics; COVID-19 transmission timescales; Optimal policy
JEL Codes: H12; I12; I18; J17
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| model mis-specification (C52) | delayed and less severe policymaking (E65) |
| mischaracterization of disease's speed (C22) | underestimations of disease scale (I12) |
| underestimations of disease scale (I12) | inadequate responses from policymakers (E65) |
| model mis-specification (C52) | higher mortality rates (I12) |
| model mis-specification (C52) | breaches of ICU capacity (H12) |