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Efficient policy interventions in an epidemic

Bisin, Alberto and Gottardi, Piero (2021) 'Efficient policy interventions in an epidemic.' Journal of Public Economics, 200. ISSN 0047-2727

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Abstract

In the context of an epidemic, a society is forced to face a system of externalities in consumption and in production. Command economy interventions can support efficient allocations at the cost of severe information requirements. Competitive markets for infection rights (alternatively, Pigouvian taxes) can guarantee efficiency without requiring direct policy interventions on socio-economic activities. We demonstrate that this is the case also with moral hazard, when the infections cannot be associated to the specific activities which originated them. Finally, we extend the analysis to situations where governments have only incomplete information regarding the values of the parameters of the infection or of firms’ production.

Item Type: Article
Uncontrolled Keywords: Epidemic, Externalities, Infection rights, Pigouvian taxes
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Elements
Date Deposited: 03 Aug 2021 12:49
Last Modified: 03 Aug 2021 13:15
URI: http://repository.essex.ac.uk/id/eprint/30790

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