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Title: A Simple Planning Problem for COVID-19 Lockdown

Author(s): Fernando Alvarez, David Argente and Francesco Lippi

Publication Date: April 2020

Keyword(s): Dynamic programming, epidemic control, lockdown and Quarantine

Programme Area(s): International Macroeconomics and Finance

Abstract: We study the optimal lockdown policy for a planner who controls the fatalities of a pandemic while minimizing the output costs of the lockdown. The policy depends on the fraction of infected and susceptible in the population, prescribing a severe lockdown beginning two weeks after the outbreak, covering 60% of the population after a month, and gradually withdrawing to 20% of the population after 3 months. The intensity of the optimal lockdown depends on the gradient of the fatality rate with respect to the infected, and the availability of antibody testing that yields a welfare gain of 2% of GDP.

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Bibliographic Reference

Alvarez, F, Argente, D and Lippi, F. 2020. 'A Simple Planning Problem for COVID-19 Lockdown'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14658