彼得森经济研究所-加速接种新冠疫苗的经济成本和效益（英文）-2021.5-16正式版

POLICYBRIEF21-11EconomicCostsandBenefitsofAcceleratedCOVID-19VaccinationsJosephE.Gagnon,StevenKamin,andJohnKearnsMay2021Note:TheauthorsthankOlivierBlanchard,ChadBown,JimCapretta,MonicadeBolle,JacobKirkegaard,andMarcusNolandforhelpfulcommentsandsuggestions.Allerrorsandopinionsaretheauthors’ownanddonotnecessarilyreflecttheviewsoftheAmericanEnterpriseInstitute,thePetersonInstitute,orothermembersoftheirmanagementandresearchstaff.I.INTRODUCTIONJustasCOVID-19producedaglobaleconomicshock,theCOVID-19vaccinationprogramsaregenerallyunderstoodtobeaprerequisiteforareturntonormalcyinoursocialandeconomiclives.Emergencymeasurestoresearch,test,produce,anddistributevaccineshavebeenexpensive,butincreasesinGDPresultingfromthevaccinesareexpectedtoexceedthosecostsbywidemargins.FewstudieshavequantifiedtheeconomiccostsandbenefitsofdifferentratesofCOVID-19vaccination,however.ThisPolicyBrieffocusesondevelopingsuchaquantitativeassessmentfortheUnitedStates;theapproachmaybeappliedtoothercountriesaswell.JosephE.GagnonisseniorfellowatthePetersonInstituteforInternationalEconomics.StevenKaminisresidentscholarattheAmericanEnterpriseInstitute.JohnKearnsisresearchassistantattheAmericanEnterpriseInstitute.Twoillustrativescenariossupporttheconclusionthatmostplausibleoptionstoacceleratevaccinationswouldhaveeconomicbenefitsthatfarexceedtheircosts,inadditiontotheirmoreimportantaccomplishmentofsavinglives.ThisPolicyBriefshowsthatif,forexample,theUnitedStateshadadoptedamoreaggressivepolicyin2020ofunconditionalcontractswithvaccineproducers,theup-frontcostwouldhavebeenhigherbutthousandsofliveswouldhavebeensavedandeconomicgrowthwouldhavebeenstronger.Instead,thefederalgovernmentconditioneditscontractsonthevaccines’beingprovensafeandeffective.TheprojectionspresentedhereshowthatevenifunconditionalcontractsledtosupportforvaccinesthatfailedthephaseIIItrialandultimatelywerenotused,thecostwouldhavebeenworthit.1750MassachusettsAvenue,NW|Washington,DC20036-1903USA|+1.202.328.9000|PB21-11|MAY20212ꢀThefewstudiesthathaveaddressedthisissuefindthatvaccinationsleadtoverysubstantialincreasesinGDPrelativetotheircost.JuanCastilloandcolleagues(2021)calculatethatabaselinepathofglobalvaccinations,inwhichitwouldtaketwoyearstovaccinate70percentoftheworld’spopulation,wouldboostglobalGDPby$8.7trillioncomparedwithanalternativewithoutvaccinations;afasterpaceofvaccinationthathastenstheendofthepandemicby10monthswouldleadtoanadditional$970billioninworldGDP.Butthisstudyreliesonoutdated(mid-2020)estimatesoftheeffectofthepandemiconglobalGDP.Italsodoesnotaccountforadjustmentsbyhouseholdsandbusinessesthathavemoderatedtheeconomiceffectofthedisease.CemÇakmakliandcolleagues(2021)donotcalculatetheeconomicbenefitsofvaccinationperse,buttheyfindthatfailuretovaccinatetheworld’sdevelopingeconomiescouldcosttheworldbetween$1.5trillionand$6.1trillion;impactsontheUnitedStatesalonecouldbeashighas$670billion.Theiranalysisforthemostpartreliesonacalibratedgeneralequilibriummodel,anditisunclearhowwellitmirrorsreal-worldbehavior.Ourstudydiffersfromthisandotherresearchinanumberofways.First,ourestimatesoftheeconomiceffectsofthepandemicarebasedonanempiricalmodeloftheresponsesofGDPtoCOVID-19deathsandlockdownregulations.Second,wefocusprimarilyontheeffectsofvaccinationontheUSeconomy.And,finally,ratherthanattemptingtoquantifytheeconomiceffectsofanall-or-nothingvaccinationeffort,weconsidertheeffectsoffasterorslowerpathsofvaccination,comparedwithabaselinepathprojectedbypublichealthexperts.Thisnarrowerfocusismoreusefulbecauseitnarrowsthespotlighttoallocationdecisionsthatcanyetbemadebypolicymakersorthatcouldbemadeinafuturepandemic.Itshouldalsobemorerealistic,inthatmovingfromnovaccinationprogramtoarapidprogramwouldlikelyinducesubstantialchangesineconomicandpersonalbehaviorthatwouldnotoccurwithincrementaldifferencesinthepaceofvaccination.Aspreviousstudieshavefound,vaccinationsareindisputablycost-efficient,butowinginparttothemoremarginalchangesinthepaceofvaccinationunderconsiderationheretheeffectsarelessdramatic.Forexample,onescenarioassumesthat,priortothelaunchofphaseIIIvaccinetrialslastyear,thefederalgovernmenthadsignedunconditionalcontractstopurchasevaccinesfromtheproducersinsteadoftheconditionalcontractsitactuallyused.Theunconditionalcontractswouldhaveexposedthegovernmenttotheriskofpayingforsomevaccinesthatwerenoteffective—butitwouldhaveenabledproducerstobeginlarge-scaleproductionthreetofourmonthsearlierthantheyactuallydid,withtheimmediatedistributionof4milliondosesofvaccineperdayonthegrantingofEmergencyUseAuthorization,saving35,000livesandboosting2021GDPby$64billion.Theestimatedincrementalcostofthisscenarioisnomorethan$20billionandpotentiallymuchless.Thefiscaleffectsalone(highertaxesandlessentitlementspending)wouldexceedthecostoffastervaccinationsbyatleast$12billion,meaningthattherewouldactuallybenonetcosttothegovernmentofacceleratingvaccinationsinthismanner.Thus,alltold,theapproachtoprocurementspecifiedinthisscenarionotonlysavesmanylivesbutalsoraisesUSGDPandreducesthefiscaldeficit.Wealsoexamineaslower-than-baselinescenario,basedonthepaceofvaccinationsthathasoccurredandisprojectedfortheEuropeanUnion.Thisleadsto16,000moredeathsand$36billioninlowerGDP,comparedwithdirectcostsavingsofonlyaround$1billionto$2billionandanetincreaseinthePB21-11|MAY20213ꢀfiscaldeficitofatleast$16billion.Webelieveotherplausiblescenariosinwhichvaccinesareacceleratedorretardedwouldhavesimilarcost-benefitresults.Althoughourmethodologyismoreempiricallygroundedthanotherstudies,itisstillsubjecttoalargerangeofuncertainty.Nevertheless,wefindwidemarginsofbenefitsovercostsdespiteconservativeassumptions.Accordingly,itisclearthatpolicymakersshouldbesearchingmuchmoreintenselyforwaystoacceleratevaccinationsbothnowandinfuturepandemics.Savinglivesissurelythemostimportantreasontodoso,butitiscomfortingtoknowthattherearelargeneteconomicbenefits.OurfocusisontheUnitedStates,butourempiricalestimatesalsoapplytootheradvancedeconomies.Weleavetheanalysisofdevelopingeconomiesforfuturework,butweareconfidentthatbenefitsexceedcoststhereaswellespeciallyifthelessexpensivevaccinesareused.II.ALTERNATIVEVACCINATIONPATHSANDHEALTHOUTCOMESOurbaselinevaccinationpathisthatassumedbytheInstituteforHealthMetricsandEvaluation(IHME)asofApril19,2021.1•Baseline:

ThepaceofdailyvaccinationsrampsupsharplyinAprilandthenreturnstonearzerobylateMay.IHMEassumesthat175millionAmericanadultsgetatleastoneshotand155millionare“effectively”vaccinatedbysummer,afterwhichnomorevaccinesaresoughtbytheUSpopulation.Thisassumptionisbasedonsurveysofpeople’swillingnesstoacceptthevaccine(about69ꢀpercentofadultAmericanswouldhavereceivedatleastoneshot,whichIHMEassumesissufficienttodriveCOVID-19deathstominimallevels).Weconsidertwoalternativestothebaselinepath.The“preproduction”pathassumesthat,duringthesummerof2020,thefederalgovernmenthadcommittedwiththevariousvaccineproducerstomakeunconditionalpurchasesoftheirvaccinesassoonastheywerereadytostartphaseIIItrials(whichinvolvetestingonlargenumbersofsubjects),butbeforethosetrialshadprovensuccessfulandgarneredapprovalbytheFoodandDrugAdministration(FDA).BythestartofthephaseIIItrials,thefinalcompositionofthevaccinewassettledandcompaniescouldhavebegunmassproduction.ForModernaandPfizer,thetwocompaniesprovidingthevastmajorityofvaccinesforAmericans,productioncouldhavestartedinAugust2020insteadofNovember2020.21IHMEprojectionsareavailableat/covid/updates.Detaileddataonvaccinationhistorycanbefoundat/covid-vaccinations.2TheUSgovernmentcontractedtopurchase100milliondosesofPfizer’svaccineonJuly22,2020,and100milliondosesofModerna’svaccineonAugust11,2020,butthesecontractswerecontingentonasuccessfulphaseIIItrialandFDAapproval.ModernaandPfizerbegantorampuplarge-scaleproductioninNovember,aheadofFDAapproval,basedonpositivetrialresults.Inourpreproductionscenario,ModernaandPfizerwouldhavebeguntheramp-upinAugustandwouldhavehadenoughdosesonhandbythemiddleofDecembertodistribute4milliondosesadayindefinitely.SeeU.S.GovernmentEngagesPfizertoProduceMillionsofDosesofCOVID-19Vaccine,HHSPressOffice,July22,2020;PfizerUpdateOnOurU.S.COVID-19VaccineCandidateDistributionPreparedness,Pfizerpressrelease,November16,2020;andModernaReportsThirdQuarter2020FinancialResultsandProvidesBusinessUpdates,Modernapressrelease,October29,2020.Johnson&Johnson’svaccinedevelopmentwassomewhatbehindthoseofModernaandPfizer,butittoowaitedforFDAapprovalbeforelarge-scaleproduction.SeeJohnson&Johnsonconfidentin1BdosegoalforCOVID-19vaccinenextyear,lookingaheadto2022,FiercePharma,November12,2020.PB21-11|MAY20214ꢀThisarrangementdiffersfromthebaseline(thatis,whatactuallytranspired)inthattheactualcontractssignedbythegovernmentin2020wereconditionalonasuccessfulphaseIIItrialandFDAapproval.Althoughthevaccinecompaniesstartedtosecurefacilitiesandlineupsuppliersimmediatelyafterthecontractsweresigned,theywaiteduntilafterphaseIIIresultsbecameavailabletostartlarge-scaleproduction.Asaconsequence,relativelylittlevaccinehadbeenproducedatthetimeofFDAapproval.Inthepreproductionscenario,totalpurchasesthroughtheendof2021wouldbeforasmanyasfourtimesthenumberofdosesassumedinthebaselinepath.TheexcesspurchaseswouldbemadeinanticipationthatsomeofthevaccineswouldfailorbemarkedlylesssuccessfulinphaseIIItrials.Butinsofaraseveryproducerwouldhavebeenpaidforacontractednumberofdoses,whetherornottheyweresuccessful,thecompanieswouldhaverampedupproduction3capacityinadvanceofthetrials.beginimmediatelarge-scaledistributionofvaccineswithFDAEmergencyUseAuthorization.Weassumethefederalgovernment,coordinatingwithstateand4Supplieswouldthushavebeenavailableto5localauthoritiesaswellasthecompanies,wouldhavesetupthedistributionsysteminadvanceofvaccineapprovalsandproduction.Toprovideasenseoftherangeofplausiblevaccinationpathsandtheirconsequences,wealsoconsideraslower-than-baselinepaththatmimicstheexpectedtrajectoryofvaccinationsintheEuropeanUnion(scaledinproportiontotheUSadultpopulation),basedonthelatestIHMEprojections.TheEuropeanUnionwaslessaggressivethantheUnitedStatesinsecuringvaccinesduring2020.Figureꢀ1displaysthebaselineandtwoalternativevaccinationpaths.••Preproduction:

Thispathassumesthat4milliondosesareadministeredeachdaystartingatthebeginningofbaselinevaccinations(December16,2020)andcontinuinguntilmid-March2021.Thesameshareofthepopulationisultimatelycoveredasinthebaselinepath,butcoverageisachievedmorethantwomonthsearlier.European:

Vaccinationsinthispathstarttwoweekslaterthanbaselineandrampupmoreslowly,reachingthesameplateauasinthebaselinebythebeginningofJuly2021.ThispathisbasedonactualEUdatathroughApril619andIHMEprojectionsthereafter.ThepathisscaledinproportiontotheUSadultpopulation.3Thenumberofdosesactuallycontractedbythefederalgovernmentisnearlyfourtimesasmanyasassumedinthebaselinepath.ItisnotclearhowmanywillbedeliveredintimetobeusefulforAmericans(ordeliveredatallbecausetheymaynotreceiveFDAapproval),butthegovernmentislikelytobeabletosellordonatethemforuseabroad.Thus,excessdosesinthepreproductionpathmaynothaveaveryhighnetcost.45Intheeventthataproducer’svaccinedoesnotproveeffective,thegovernmentandtheproducercouldbargainforareductioninthenumberofdosesproducedinexchangeforsomesharingofthecostsavings.Althoughproductionwouldhavebegunthreetofourmonthsearlierthanotherwise,itislikelythatcumulativeproductionbymid-December2020wouldnothaveequaledactualproductionasoflateMarch2021,owingtobottlenecksandcongestioneffects.Todistribute4milliondosesadaystartinginmid-December,asassumedinthepreproductionscenario,cumulativeproductionwouldhaveneededtobeacceleratedbyonlytwomonths.SeeModernaAndPfizerOnTrackToHitVaccineProductionGoals,NPR,March11,2021.6IHMEassumesaslightlyhigherplateauinEuropebasedonsurveysofvaccineacceptance.WeapplytheIHMEAmericanplateauinthisscenario,asourintentistogaugewhatwouldhappenintheUnitedStateshadthegovernmentchosenaslowerpathofvaccinations.PB21-11|MAY20215ꢀFigure1Pathofvaccinationsunderbaselineandalternativescenarios,December2020–December2021cumulativedosesadministered(millions)300200100April200December2020February2021April2021June2021August2021October2021December2021BaselinePreproductionEuropeanNote:ProjectionsforthebaselinescenariostartonApril20,2021.Sources:

InstituteforHealthMetricsandEvaluation(IHME);authors’calculations.ThebaselinepathofdeathsisfromtheIHME’sreferencescenarioandisconsistentwiththebaselinepathofvaccination.TheIHMEprojectsdeathstodeclinesteadilyto179perdaybyAugust1,2021.ThispathassumesthatnopeoplearevaccinatedafterlateMay.WeassumethatthedeclineindeathsfromlateMaytolateJulyreflectsalaginthebuildupofimmunityfollowingvaccinationplusalagbetweeninfectionanddeathbutthattheselagsaremostlyplayedoutbyAugust1.Thus,weextrapolatedeathsattheAugust1ratethroughtheendoftheyear.TheresultsarenotsensitivetodifferentassumptionsaboutdeathsinthesecondhalfoftheyearbecauseallthedifferencesinthealternativescenariosoccurbeforeAugust1.Foreachofthealternativepathsofvaccinations,weadjustdailydeathsbasedonthedifferencebetweenbaselineandalternativevaccinationrates.Weassumethateachvaccinedosereducestheriskofdeathby47.5ꢀpercent,basedonthetwo-doseefficacyofthePfizerandModernavaccinesof95ꢀpercent.Weassume7alagof14daysfromeachdosetotheincreasedimmunity,andalagof21daysfrominfectiontodeath.Thus,vaccinesdonotreducedailydeathsuntil35days7Therearetwooffsettingerrors,whichareeachrelativelyminor.First,weassumethatallofthe155million“effectively”vaccinatedadultsintheIHMEprojectiongettwodosesofPfizerorModerna;butamodestfractionofthosewillactuallygettheJohnson&Johnsonsingle-dosevaccinethatis72percenteffective,slightlyreducingoveralleffectiveness.Ontheotherhand,theIHMEprojectsthat22millionpeoplewillskiptheseconddoseofPfizerandModernavaccines.Becausethefirstdoseprovidesmoremarginaleffectivenessthanthesecond,thiswouldslightlyraisetheoveralleffectivenessofagivennumberofdoses.PB21-11|MAY20216ꢀafterinjection.Aftertheselagsruntheircourse,deathsdeclineorriseininverseproportiontotheriseordeclineintotalvaccinationsrelativetopopulation.Figure2displaysthebaselineandalternativepathsofdailydeaths.Intotal,thefasterpaceofvaccinationunderthepreproductionpathtranslatesinto35,000savedlivesin20218;theEuropeanscenariocosts16,000lives.Figure2Pathofdailydeathsunderbaselineandalternativescenarios,December2020–December2021dailydeaths(seven-dayrollingaverage)3,0002,0001,000April200December

February2020

2021April2021June2021August2021October2021December2021BaselinePreproductionEuropeanNote:ProjectionsforthebaselinescenariostartonApril20,2021.Sources:

InstituteforHealthMetricsandEvaluation(IHME);authors’calculations.III.ECONOMICBENEFITSOFVACCINATIONTheeconomicbenefitsofvaccinationaremeasuredastheboosttoGDPcausedbyreducedvoluntarysocialdistancingandofficiallockdownrequirementsasthepandemicissuppressed.Wealsoconsiderthemonetaryvalueoflivessaved,andthefiscalboost(higherrevenues)fromhigherGDP.III.1MethodforAssessingEffectsonRealGDPofDifferentVaccinationPathsToassesstheimpactofthevaccinationsonrealGDP,weuseapanelregressionmodelappliedto23high-incomeeconomiesthathavepublishedquarterlyGDPdataformostorallof2020,includingtheUnitedStates(seeappendix).Thequarter-to-quarterpercentchangeinrealGDPisregressedonthearithmetic(notpercent)changeinthenumberofdeathspercapitainthatquarter(which8WealsoimplementedtheAtkeson(2021)nonlinearSEIR(Susceptible-Exposed-Infective-Recovered)modelofepidemics,creatingresidualstotrackthebaselinepathandthencalculatingthechangeindeathsimpliedbythepreproductionpathofvaccinations.Thepreproductionpathsaved46,000lives,modestlyabovetheestimatefromourlinearapproach,suggestingthatourbenefitcalculationisconservative.PB21-11|MAY20217ꢀisbelievedtoinfluencetheextentofvoluntarysocialdistancing),thearithmeticchangeinameasureoflockdownrestrictions(theOxfordStringencyIndex,orOSI),andlaggedGDPgrowth.9,10Oneissuewehadtoaddressisthelikelyendogeneityofdeathsandlockdownrestrictions.Forexample,ariseinsocialdistancingnotassociatedwithincreasesindeathsormorestringentlockdowns—asmightoccurinresponsetoasuccessfulpublicinformationcampaign—couldsimultaneouslyleadtodeclinesinCOVID-19cases,deaths,OSI,andeconomicactivity;thiscouldbiasthecoefficientsondeathsandOSItobemorepositive.Toaddressthisconcern,weuseatwo-stageprocedure:Inthefirststage,COVID-19deathsandOSIareregressedoncontemporaneousCOVID-19cases;inthesecondstage,theresidualsfromtheseregressions—thatis,thevariationindeathsandOSInotdirectlyrelatedtocontemporaneouscases—aresubstitutedforactualdeathsandOSI.Table1PanelregressionsforrealGDPgrowth,high-incomecountries20202020H12020H2(Intercept)-0.0046(0.0051)-0.0476***(0.0071)0.0369***(0.0061)ΔQuarterlydeaths-0.2160***(0.0316)-0.1271**(0.0497)-0.0449*(0.0233)ΔQuarterlyOxfordStringencyIndexLaggeddependentvariable-0.00030.0006***(0.0002)-0.0005(0.0002)(0.0003)-0.11500.2671-0.3770***(0.0656)(0.0820)(0.2920)R20.53290.5170920.50000.4642460.76470.747946AdjustedR2NumberofobservationsRootmeansquareerror0.04970.03270.0274*p

<0.10;**p

<0.05;***p

<0.01Note:Seeappendixforthelistofcountries.Source:

Authors’calculations.Table1presentstheestimationresults.Notethatthecoefficientsintheregressionestimatedovertheentiretyof2020(column1)implyimplausiblylargeeffectsonGDPifappliedto2021.Forexample,themodelpredictsthatifCOVID-199ThisfollowstheapproachappliedbyKaminandKearns(2021)toindustrialproductiondata.10SeeOxfordUniversity’sCOVID-19StringencyIndex.PB21-11|MAY20218ꢀdeathsfellfromtheir2020Q4averageof1,567perdaytozerobytheendof2021,andOSIfelltozerofromits2020Q4averageof68.5,thiswouldultimatelyboostUSGDPby11.1percent.Thisoutsizedeffectprobablyreflectsthefactthat,intheinitialoutbreakofthepandemic,thepracticeofsocialdistancingreactedverystronglytoevensmallCOVID-19deathcountsandlockdownrestrictionswerecrudelyandindiscriminatelyapplied.Ashouseholds,workers,andbusinessesadjustedtothenewenvironment,theeffectofdeathsandlockdownsoneconomicactivitydiminished.Accordingly,weusetheestimatesbasedon2020H2,(thethirdcolumnintable1)togaugetheeffectoftheeasingpandemiconeconomicactivity.Thesecoefficientssuggestthattheeradicationofdeathsandlockdownsfromtheir2020Q4levelwouldboostGDPby4.0ꢀpercent,amoreplausibleincreasethatleadstoamoreconservativeestimateofthebenefits.Asanalternativeapproachtoestimatingtheeconomiceffectsofpandemicvariables,weestimatedthesameeconometricmodelasdescribedabove,butusingdataonGDP,COVID-19deaths,andOSIfromthe50USstatesandtheDistrictofColumbiainsteadofhigh-incomecountries.Theestimationresultsarepresentedintable2.Table2PanelregressionsforrealGDPgrowth,USstates20202020H12020H2-0.0049*-0.0411***0.0411***(0.0015)(Intercept)(0.0029)(0.0033)-0.0665***(0.0109)-0.0208***(0.0060)0.0028ΔQuarterlydeaths(0.0028)-0.0015***(0.0002)0.0004**(0.0002)-0.00001ΔQuarterlyOxfordStringencyIndexLaggeddependentvariable(0.00009)-0.159***(0.0820)2.886***(0.3180)-0.390***(0.0166)R20.51290.72930.72101020.93540.9334102AdjustedR20.5056NumberofobservationsRootmeansquareerror2040.04250.02130.0088*p

<0.10;**p

<0.05;***p

<0.01Source:

Authors’calculations.Thecoefficientsforthefull2020year,whiledifferentfromthoseestimatedforthecross-countrydataset,havesimilarimplicationsforGDPwhentakentogether:theeradicationofCOVID-19deathsandOSIwouldboostUSGDPby11.6ꢀpercent.PB21-11|MAY20219ꢀHowever,usingthedatafromonlythesecondhalfof2020,thecoefficientondeathsispositiveandbothcoefficientsareminusculeandinsignificantlydifferentfromzero.ItispossiblethatthevariationindeathsandOSIwasnotsufficientlygreatinthesecondhalfof2020topermitpreciseidentificationofpandemiceconomiceffects.ItmayalsobethattheconsiderableeconomicintegrationofUSstates,comparedwiththeeconomiesinourcross-countrydataset,meanttherewaslessvariationinGDPperformanceacrossstatesthatcouldbeusedtoidentifypandemiceffects.AsafurthercheckontheeconomiceffectofCOVID-19ontheUnitedStates,wenotethatUSGDPin2020Q4was4.4percentbelowasteady2ꢀpercentgrowthpathfromits2019Q4level.Thisfigureisveryclosetothe4.0ꢀpercentnumbercitedabove,whichwastheestimatedeffectofreducingdeathsandlockdownrestrictionstozerofromtheir2020Q4levels,usingthecoefficientsfromourmulticountryregressionforthesecondhalfof2020.Basedontheseconsiderations,weusedthemodelestimatedfromthemulticountrydatasetoverthesecondhalfof2020(table1,column3)toformourprojections.TousethemodeltoprojectfutureGDP,weneedtoenterasinputsnotonlytheprojectionsforCOVID-19deathsdiscussedabove,butassociatedpathsoflockdownrestrictions(OSI).TherelationshipbetweendeathsandOSIhasbeenquitelooseandappearstovaryovertime.Butitislikelythatiftheviruswerelargelyeliminated(100percentdeclineindeaths),thenlockdownrestrictionswouldbelargelyeliminated(100percentdeclineinOSI).Accordingly,weassumethatprojectedpercentdeclinesindeathswilltranslateonaone-for-onebasistopercentdeclinesinOSI,asshowninfigure3.Figure3Pathofrestrictions(OxfordStringencyIndex)underbaselineandalternativescenarios,December2020–December2021OxfordStringencyIndexlevel(maximum=100)80604020April200December2020February2021April2021June2021August2021October2021December2021BaselinePreproductionEuropeanNote:ProjectionsforthebaselinescenariostartonApril20,2021.Sources:

InstituteforHealthMetricsandEvaluation(IHME);OxfordUniversity;authors’calculations.PB21-11|MAY202110ꢀIII.2EstimatedEffectsofAlternativeVaccinationPathsonGDPToassesstheeffectsofvaccinationsonGDP,westartbyspecifyingabaselinepathforGDP,basedontheMarch2021ConsensusForecastprojection.ThisentailsQ4/Q4growthof6.0percentinrealGDP.WeassumethatthispathofGDPisassociatedwithourbaselinepathofvaccinations,deaths,andOSIdescribedabove.WethenuseourmodeltoestimatehowdeviationsinvaccinationsanddeathsfrombaselineinouralternativevaccinationpathstranslateintoalternativepathsforGDP.Figure4comparesthebaselinepathofrealGDP(annualrate)tothesealternativeGDPpaths.Inthepreproductionscenario,theinitialmorerapiddeclineindeathsandOSIinducedbythefasterpaceofvaccinationsleadstomorerapidGDPgrowthinQ1.However,insofarasdeathsandOSIendupinthesameplaceasinthebaselinescenariobymidyear,thesepandemicindicatorsimprovelessquicklythaninthebaselinebythesecondquarter,afterwhichGDPinthetwoscenariosconverges.TheoppositeeffectoccurswiththeEUpath:Q1GDPgrowsmoreslowlythaninthebaselineinresponsetoaslowerimprovementinpandemicindicators,butthencatchesuptobaselinebythethirdquarter.Figure4RealGDPunderalternativevaccinationscenarios,2020Q4–2021Q4realGDP(billionsof2012dollars)20,00019,75019,50019,25019,00018,7502020Q4Baseline2021Q12021Q22021Q32021Q4PreproductionEuropeanNote:Projectionsstartin2021Q1.Sources:InstituteforHealthMetricsandEvaluation(IHME);OxfordUniversity;authors’calculations.Table3summarizestheprojectedresultsfor2021asawhole;thesecondcolumnconvertsGDPin2012constantdollarsto2020currentdollarstofacilitatecomparisonwithcostsincurredin2020.Thefasterpaceofvaccinationsinthepreproductionscenarioincreases2021GDPby$64billion;ifUSvaccinationsfollowedtheEUpath,GDPwouldbe$36billionlower(column3).PB21-11|MAY202111ꢀTable3Projectedeconomicactivityin2021underthreevaccinationpathsValu