Restarting the Economy While Saving Lives Under COVID-19

Restarting the Economy While Saving Lives Under COVID-19

by Carlo A. Favero (Bocconi University), Andrea Ichino (European University Institute), Aldo Rustichini (University of Minnesota)

The main question all countries are facing throughout the world is how to restart their economies while saving lives once the initial diffusion of Covid-19 has been put under control, thanks to emergency lockdown measures, and the so-called “Phase 2” can begin. We present simulations that answer this question based on data for two emblematic Italian regions: Lombardy and Veneto. These contiguous areas in the north of the country were the first in Italy to be hit by the Covid-19 outbreak (at about the same time) but experienced very different evolutions of the infection. The two main factors determining this dichotomy are the presence of delays in reacting correctly to the early phase of the infection together with constraints in the number of intensive care places in hospitals (HC). Our main result is that there exist a number of efficient mixed strategies based on the age and sector criteria, that would dramatically reduce the total number of fatalities with relatively minor GDP losses until the threshold of approximately a 5-10 percent loss.

The Paper: "Restarting the Economy While Saving Lives Under COVID-19" by Carlo A. Favero, Andrea Ichino and Aldo Rustichini