COVID-19: what if immunity wanes?

Çenesiz, A. ORCID: 0000-0002-3889-4180 and Guimaraes, L., 2021. COVID-19: what if immunity wanes? Canadian Journal of Economics / Revue Canadienne d'Économique. ISSN 0008-4085 (Forthcoming)

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Using a simple economic model in which social-distancing reduces contagion, we study the implications of waning immunity for the epidemiological dynamics and social activity. If immunity wanes, we find that COVID-19 likely becomes endemic and that social-distancing is here to stay until the discovery of a vaccine or cure. But waning immunity does not necessarily change optimal actions on the onset of the pandemic. Decentralized equilibria are virtually independent of waning immunity until close to peak infections. For centralized equilibria, the relevance of waning immunity decreases in the probability of finding a vaccine or cure, the costs of infection (e.g., infection-fatality rate), the degree of partial immunity, and the presence of other NPIs that lower contagion (e.g., quarantining and mask use). In simulations calibrated to July 2020, our model suggests that waning immunity is virtually unimportant for centralized equilibria until at least 2021. This provides vital time for individuals and policymakers to learn about immunity against SARS-CoV-2 before it becomes critical. JEL Classification: D62; E17; I12; I18.

Item Type: Journal article
Publication Title: Canadian Journal of Economics / Revue Canadienne d'Économique
Creators: Çenesiz, A. and Guimaraes, L.
Publisher: Wiley
Date: 18 May 2021
ISSN: 0008-4085
Divisions: Schools > Nottingham Business School
Record created by: Laura Ward
Date Added: 24 May 2021 07:51
Last Modified: 31 May 2021 15:02

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