Working Paper Department of Economics, University of Pittsburgh
Resumen
Official recession figures ignore the costs associated with the loss of human life due to COVID-19. This paper constructs full recession measures that take into account the death toll. Our model features tractable heterogeneity, constant relative risk aversion to mortality risk, and age-specific survival rates. Using an estimated one-year death toll of 500 thousand people and a 3.5% recession, we find that the corresponding full recession is 24% on average across individuals, 13% for a median voter, and 7% for planner with moderate inequality aversion.
