Abstract:

We study targeted lockdowns in a multi-group SIR model where infection, hospitalisation and fatality rates vary between groups—in particular between the young”, “the middle-aged” and the “old”.

Our model enables a tractable quantitative analysis of optimal policy. For baseline parameter values for the COVID-19 pandemic applied to the US, we find that optimal policies differentially targeting risk/age groups significantly outperform optimal uniform policies and most of the gains can be realised by having stricter lockdown policies on the oldest group.

Intuitively, a strict and long lockdown for the most vulnerable group both reduces infections and enables less strict lockdowns for the lower-risk groups.

We also study the impacts of group distancing, testing and contact tracing, the matching technology and the expected arrival time of a vaccine on optimal policies. 

Overall, targeted policies that are combined with measures that reduce interactions between groups and increase testing and isolation of the infected can minimise both economic losses and deaths in our model.

                                       

Daron Acemoglu. Image by: Jared Charney (MIT).

Daron Acemoglu is the Charles P Kindleberger Professor of Applied Economics in the Department of Economics at the Massachusetts Institute of technology and a member of the Economic Growth Program of the Canadian Institute of Advanced Research. He is also affiliated with the National Bureau of Economic Research, the Center for Economic Performance, the Center for Economic Policy Research, and Microsoft Research Center.

Since 1993, he has been a lecturer at the London School of Economics and an assistant professor, the Pentti Kouri Associate Professor, and a professor of economics at MIT. Acemoglu has received numerous awards and fellowships, including the John Bates Clark Medal in 2005, given every two years to the best economist in the United States under the age of 40 by the American Economic Association, and holds an honorary doctorate from the University of Utrecht.

He has co-authored, with James A Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty and, a 2019 publication, The Narrow Corridor: States, Societies, and the Fate of Liberty. This most recent work is a sweeping account of the rise of the modern world, Acemoglu and Robinson argue that only in rare circumstances have states managed to produce free societies. States must walk a thin line to achieve liberty, passing through what the authors describe as a “narrow corridor”.

Acemoglu received a BA in Economics at the University of York in 1989, an MSc in Mathematical Economics and Econometrics at the London School of Economics in 1990, and a PhD in Economics at the London School of Economics in 1992.

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