| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP15558 |
| DP15558 The Value of a Cure: An Asset Pricing Perspective | |
| Viral Acharya; Timothy Johnson; Suresh Sundaresan; Steven Zheng | |
| 发表日期 | 2020-12-11 |
| 出版年 | 2020 |
| 语种 | 英语 |
| 摘要 | We provide an estimate of the value of a cure using the joint behavior of stock prices and a vaccine progress indicator during the ongoing COVID-19 pandemic. Our indicator is based on the chronology of stage-by-stage progress of individual vaccines and related news. We construct a general equilibrium regime-switching model of repeated pandemics and stages of vaccine progress wherein the representative agent withdraws labor and alters consumption endogenously to mitigate health risk. The value of a cure in the resulting asset-pricing framework is intimately linked to the relative labor supply across states. The observed stock market response to vaccine progress serves to identify this quantity, allowing us to use the model to estimate the economy-wide welfare gain that would be attributable to a cure. In our estimation, and with standard preference parameters, the value of the ability to end the pandemic is worth 5-15% of total wealth. This value rises substantially when there is uncertainty about the frequency and duration of pandemics. Agents place almost as much value on the ability to resolve the uncertainty as they do on the value of the cure itself. This effect is stronger – not weaker – when agents have a preference for later resolution of uncertainty. The policy implication is that understanding the fundamental biological and social determinants of future pandemics may be as important as resolving the immediate crisis. |
| 主题 | Financial Economics ; Macroeconomics and Growth ; Public Economics |
| 关键词 | Pandemic Vaccine Covid-19 Rare disasters Regime-switching Parameter uncertainty |
| URL | https://cepr.org/publications/dp15558-1 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/544557 |
| 推荐引用方式 GB/T 7714 | Viral Acharya,Timothy Johnson,Suresh Sundaresan,et al. DP15558 The Value of a Cure: An Asset Pricing Perspective. 2020. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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