A Simple Planning Problem for COVID-19 Lockdown

We study the optimal lockdown policy for a planner who wants to control the fatalities of a pandemic while minimizing the output costs of the lockdown.We use the SIR epidemiology model and a linear economy to formalize the planner's dynamic control problem.The optimal policy depends on the fraction of infected and susceptible in the population.We parametrize the model using data on the COVID19 pandemic and the economic breadth of the lockdown.The quantitative analysis identifies the features that shape the intensity and duration of the optimal lockdown policy.Our baseline parametrization is conditional on a 1% of infected agents at the outbreak, no cure for the disease, and the possibility of testing.The…