What Will Be the Economic Impact of COVID-19 in the US? Rough Estimates of Disease Scenarios

This note is intended to introduce economists to a simple SIR model of the progression of COVID-19 in the United States over the next 12-18 months.An SIR model is a Markov model of the spread of an epidemic in a population in which the total population is divided into categories of being susceptible to the disease (S), actively infected with the disease (I), and recovered (or dead) and no longer contagious (R).How an epidemic plays out over time is determined by the transition rates between these three states.This model allows for quantitative statements regarding the tradeoff between the severity and timing of suppression of the disease through social distancing and the progression of the disease in the…