Criticism of Acemoglu Presentation in Webinar

The economic implications of COVID-19

A webinar series from the Princeton Bendheim Center for Finance

Daron Acemoglu on the benefits of targeted policies

Daron Acemoglu is a Professor of Economics at MIT

This presentation title is A Multi-Risk  SIR Model with Optimally Targeted Lockdown. Daron studied this paper with other Economist in April 2020. In this study, discuss about what policy is good policy in SIR content. One of the key trade-off is between economic and public health outcomes.

The first reason as to why Acemoglu believe SIR Model is because varieties of heterogeneity which is include age group and mortality rate relation in COVID-19. From my opinion, Acemoglu must have mention on virus carrier group which is mainly 0 – 19 age group. In this context, mortality rate is not only more important issue but also carrier of virus group is significant on spread of propagation. I think, if we set up an optimal control problem for this environment—allowing targeting by group. We can add 0-19 ages group as a parameter values in model.

A country which has not enough source of fund for all employee in country, this SIR Model is suitable for them because this model says minimize social interactions that show social contact rates between group in model. Economies have to continue on their way in difficult condition in order to counterbalance supply and demand on the market. Besides, Daron think about lockdown may not include all people, under the this thing, there is sustainability of economies. It’s supported that strict lockdown on the oldest age group improves things significantly and economic losses decline from 24% of one year’s GDP to under 13%. The most crucial thing is  divided society in pandemic term is beneficial for economies. Combine between group-distancing and testing – tracing in pandemic term are better choice for country protect their economics power.

In this presentation, applying semi – targeted policy is better uniform policy for lockdown duration also . However, I tend to disagree with this point of view as I think lockdown policy must continue partially until find vaccine where is actualized semi – targeted policy. In slide 26th page, shows finished lockdown after nearly 200 days. If there is no vaccine until that term, second wave of virus appear. It will be harmful for economy. If I was in this conference, definetely want to ask this question to Mr. Acemoglu.

As a conclusion discuss there are many reasons about Mr. Acemoglu’s Presentation in Princeton which are must add different age group as a parameter value because of probability of carrier this virus which is between 0 – 19 ages on the model, lockdown may not include all people in that term for reducing economic loss and using semi – targeted policy lockdown until finding vaccine or until the late in that term not discard lockdown directly, use partially lockdown may be better way.