A team of mathematicians and economists from NYU Abu Dhabi (NYUAD) examined how to balance the need to “flatten the curve” and reduce the spread of COVID-19 while trying to prevent economies from sustaining prolonged, severe, and potentially permanent damage. The team developed a mathematical model that could offer a template for policy-makers looking for the best approach to evaluate the human and economic costs of measures to contain the pandemic.
In this work, Mortality containment vs. economics opening: Optimal policies in a SEIARD model published in Covid Economics, Vetted and Real-Time Papers from CEPR, researchers from NYUAD including Visiting Professor of Mathematics Elena Beretta, Professor of Practice of Mathematics Alberto Gandolfi, and Professor of Economics Etienne Wasmer, as well as other collaborators, formalize the trade-off involved in the decision making between preserving economic activities and reducing the diffusion and the potential deaths resulting from COVID-19. They used the number of COVID-19 fatalities and the total GDP as proxies for the two effects, and provided a framework to think about economic costs and public health benefits.
The researchers analyzed various examples; first, a complete lockdown until the presumed end of the pandemic at the end of the first quarter of 2021, which few countries appear to be pursuing; then a drastic, initial lockdown, followed by a reopening, which is what most countries are currently putting in place; finally, an alternation of containment and reopening, which is a potential scenario if regained activity leads to recurrence of the virus. The central findings suggest that gradual policies of longer duration but more moderate containment have large welfare benefits. On the other hand, after a sharp lockdown has been put in place, the researchers report that an alternation of containment and reopening is worth consideration.
Beretta commented: “The central idea of our research is that it is possible to identify various opening levels that avert a sizable number of deaths without causing excessive damage to the economy. By developing this model, our hope is that policymakers will be better able to make informed decisions that balance the need to minimize the human cost of the pandemic and the desire to ensure the viability of the economies that are essential to their nations’ well-being.”