ArticleThe European journal of health economics : HEPAC : health economics in prevention and care2026
Assessing the costs and benefits of non-pharmaceutical pandemic measures using the economic values of social contacts.
Article in The European journal of health economics : HEPAC : health economics in prevention and care, 2026. The graph could read no effect estimate from its abstract, so it casts no vote on the map. Not yet cited in PubMed.
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Abstract
We develop and calibrate a two-layer macroeconomic model of a pandemic to examine the macroeconomic costs and benefits of COVID-19 public health interventions. By integrating policies into a stratified epidemic compartmental model (Susceptible-Infected-Recovered, or SIR), we analyze the impact of non-pharmaceutical interventions (NPIs) on disease transmission. We then apply a dynamic stochastic general equilibrium (DSGE) model to simulate the effects of containment policy shocks on consumption, labor supply, and production, and their implications for macroeconomic variables. The model is calibrated and simulated for the province of Ontario, Canada. Our findings highlight the significant reduction in infections due to NPIs, quantify the negative economic consequences of policy shocks, and acknowledge that labor market flexibility and business adaptations played a key role in mitigating these adverse effects. This study provides a qualitative framework for evaluating the delicate balance between public health and economic considerations in policymaking during a public health emergency.
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