Slums and pandemics.

How do slums shape the economic and health dynamics of pandemics? A difference-in-differences analysis using millions of mobile phones in Brazil shows that residents of overcrowded slums engaged in less social distancing after the outbreak of Covid-19. We develop and calibrate a choice-theoretic equilibrium model in which individuals are heterogeneous in income and some people live in high-density slums. Slum residents account for a disproportionately high number of infections and deaths and, without slums, deaths increase in non-slum neighborhoods. Policy analysis of reallocation of medical resources, lockdowns and cash transfers produce heterogeneous effects across groups. Policy simulations indicate that: reallocating medical resources cuts deaths and raises output and the welfare of both groups; mild lockdowns favor slum individuals by mitigating the demand for hospital beds, whereas strict confinements mostly delay the evolution of the pandemic; and cash transfers benefit slum residents to the detriment of others, highlighting important distributional effects.

On the cleansing effect of recessions and government policy: Evidence from Covid-19

Recessions can have a cleansing effect by encouraging the reallocation of resources from low-productivity firms towards higher-productivity ones. Whether this effect actually occurs is still debated. We contribute to answering this question by providing new evidence. Using a survey of firms matched with administrative data, we trace out the Covid-19 recession’s effects across the productivity distribution. Higher-productivity firms are found to have been more successful at maintaining employment, but there was not a rise in exit amongst lower-productivity firms. In line with the theory that support policies offset the cleansing effect of recessions, high-productivity firms are also found to have been less likely to take up government support.

Vaccines and variants: A comment on "optimal age-based vaccination and economic mitigation policies for the second phase of the Covid-19 pandemic".

This note discusses age-specific vaccination programs designed to curb the Covid-19 pandemic. We first provide some comments on the analysis by Glover et al. (2021b) and point directions where further research can be carried out. Additionally, we adapt the framework from Brotherhood et al. (2021) to assess the effects of different vaccination schemes when more infectious variants can emerge when more infections take place. We find that policy prescriptions crucially depend on taking individual behavioral responses into account and on whether variants can appear.