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Balancing Fiscal and Mortality Impact of SARS-CoV-2 Mitigation Measurements

An epidemic carries human and fiscal costs. In the case of imported pandemics, the first-best solution is to restrict national borders to identify and isolate infected individuals. However, when that opportunity is not fully seized and there is no preventative intervention available, second-best options must be chosen. In this article we develop a system of differential equations that simulate both the fiscal and human costs associated to different mitigation measurements. After simulating several scenarios, we conclude that herd immunity (or unleashing the pandemic) is the worst policy in terms of both human and fiscal cost. We found that the second-best policy would be a strict policy (e.g. physical distancing with massive testing) established under the first 20 days after the pandemic, that lowers the probability of infection by 80%. In the case of the US, this strict policy would save more than 239 thousands lives and almost $170.8 billion to taxpayers when compared to the herd immunity case.

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