Lockdown Policy Rules with a Hospital Capacity Constraint

Abstract

We analyze how hospital capacity affects health and economic outcomes during a pandemic using a macro-SIR model featuring a lockdown policy rule. The rule instructs the government to implement a lockdown when the number of ICU patients exceeds a trigger threshold—motivated broadly by a hospital capacity constraint—and to lift the lockdown when it falls below a lifting threshold. When vaccines are not available, we find that the government can reduce both COVID-19 deaths and economic loss by raising the trigger threshold in some situations. When the vaccine rollout is expected to begin in the near future, we find that the government can reduce both COVID-19 deaths and economic loss by lowering the trigger threshold.