c19economics

Follow up webinar: Macroeconomic and health impact of COVID: the meeting of two communities

This is just a following up from our webinar on the 22/01. Thanks for attending and for visiting the forum!

Thank you all again for your participation today. The video of the event is now live!

In addition, there were a few questions from participants today

  • Unmitigated scenario: often used as a comparator, but how can we account for the effects both on the health and macroeconomy of voluntary social distancing (e.g. on businesses loosing customers due to avoidance of shops?)
  • Short term economic shocks are different from a long-term recession as economies tend to rebound. Do you think the current situation is any different?
  • Were there efforts to better model test and trace programs? Not just as MPIs that are assumed to modify overall transmission?
  • What does all this modelling say about strategies for gradual easing of NPIs as vaccines start being rolled out.
  • How should vaccines be rolled out as prioritising by age in the UK has no doubt extended the lockdown and hence economic impacts, and subsequent health impacts on those who are younger?

unmitigated scenarios: in the DAEDALUS model, the unmitigated scenario assumes voluntary behaviour change that reduces transmissions. We implement this as a multiplier on the effective reproductive number at each time step. We currently do not consider any reduction in demand due to behaviour change, which is a limitation. We essentially allow an increase in inventories. This might not be as problematic as it seems, because other research has shown that demand does not decrease in all sectors during LD, and also, it recovers and even overcompensates once LDs are eased.

short versus long-term: DAEDALUS only models short term (6 month) effects. Long-term effects are likely to be much different. Most macroeconomists seem to think that demand across many sectors may recover faster than we may expect now, but there is likely to be long-term adverse effects in some parts of the economy that will take many years to recover from.

Test and trace: We did not model the impact of test and trace, except in a general dampening impact on transmisson via a mulitiplier on the effectve reproductive number.
Lifting of NPIs: We are currently adapting DAEDALUS to model the gradual lifting of NPIs as vaccine coverage increases. Gradual opening means a successive (monthly) change in the economic configuration from sectors production at LD levels back to 100% as in pre-pandemic times
Prioritizing by age: in our view, the economy recovers fastest if pressure on hospitals is eased. This means reducing transmission in those who are most likely to be admitted to hospital, i.e. the elderly and those clinicallly vulnerable. Once hospital occupancy goes down, we can open more of the economy back up.