Internal and external effects of social distancing in a pandemic

By Maryam Farboodi, Gregor Jarosch, Robert Shimer. Journal of Economics Theory, 2020

440 citations recorded by the source corpus.

We use a conventional dynamic economic model to integrate individual optimization, equilibrium interactions, and policy analysis into the canonical epidemiological model. Our tractable framework allows us to represent both equilibrium and optimal allocations as a set of differential equations that can jointly be solved with the epidemiological model in a unified fashion. Quantitatively, the laissez-faire equilibrium accounts for the decline in social activity we measure in US micro-data from SafeGraph. Relative to that, we highlight three key features of the optimal policy: it imposes immediate, discontinuous social distancing; it keeps social distancing in place for a long time or until treatment is found; and it is never extremely restrictive, keeping the effective reproduction number mildly above the share of the population susceptible to the disease.

Subfields: Modeling and Simulation, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/647298b8ba1f004b3a190e2770ebbed4d03fe401

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Citations in the corpus

The Unprecedented Stock Market Reaction to COVID-19 (2020, background): “Shimer.”
Working Remotely and the Supply-Side Impact of COVID-19 (2020, neutral): “See also, e.g., Mongey et al. (2020) and Farboodi, Jarosch, and Shimer (2021) for additional applications of SafeGraph data to the study of COVID-19. collects anonymized information on location activity from a large panel of mobile devices.”
JUE insight: Learning epidemiology by doing: The empirical implications of a Spatial-SIR model with behavioral responses (2020, neutral): “(2020) and Farboodi et al. (2020), for a similar reduced form approach. A fully dynamic rational choice micro-foundation for this approach in SIR is obtained in Appendix B. In Spatial-SIR with state space (S,A, Y,R,D), the behavioral response will depend on A. Since the fraction of asymptomatics is ”
Effects of social distancing policy on labor market outcomes (2020, positive): “These tests are particularly important for our study as during the early days of COVID-19 the pandemic and the response policies were rapidly evolving together, raising concerns about policy endogeneity (Farboodi et al., 2021).”
The Cost of the Covid-19 Crisis: Lockdowns, Macroeconomic Expectations, and Consumer Spending (2020, positive): “…the economy to quantify the economic costs and benefits of different policies (see Atkeson (2020), Barro et al. (2020), Eichenbaum et al. (2020), Farboodi et al. (2020), Jones et al. (2020), Kaplan et al. (2020), Krueger et al. (2020), Guerrieri et al. (2020), Alvarez et al. (2020), and…”
A literature review of the economics of COVID‐19 (2020, methodology): “For example, “Safegraph” data suggest that social activity in the United States started declining substantially and rapidly well before lockdown measures were imposed (Farboodi et al., 2020). Outside of the United States, a large number of studies have relied on Google LLC Community Mobility Reports”
Macroeconomic Dynamics and Reallocation in an Epidemic: Evaluating the “Swedish Solution” (2020, positive): “Consistent with our main mechanism, Farboodi et al. (2020) provide evidence from US micro-data for a large reduction in social activity by private household even prior to the implementation of public stay-at-home-orders and lockdowns of economic activity.”