Impacts of COVID-19: Mitigation Efforts versus Herd Immunity

Full text Adobe PDF file format


The rapid spread of COVID-19 is having devastating effects on the global economy. Governments around the world have been forced to pursue lockdown policies in an attempt to stem the spread of this deadly disease and bend the death curve. With death curves beginning to bend, governments will soon need to determine when and how to relax lockdown measures. The crucial question is: what are the consequences of reopening the economy? In this article, we address this question by studying both the model and the data and discuss the challenges we face moving forward.

Key findings:

  • The observed decline in daily deaths could be due to two scenarios: lockdown policies and herd immunity.
  • Both the model used by epidemiology experts and the data collected thus far cannot distinguish these two scenarios.
  • Comprehensive testing can help resolve this uncertainty by quickly and accurately identifying new cases so that future outbreaks could be contained by isolation and contact tracing measures.

JEL classification: I1, E6, H12

Key words: COVID-19, social distancing, identification problem, death curve, lockdown, herd immunity, reopening the economy, testing. link

The Federal Reserve Bank of Atlanta's Policy Hub The author would like to thank Salomé Baslandze, Chris Cunningham, Nikolay Gospodinov, Ed Nosal, and Paula Tkac for helpful comments and discussions. The views expressed here are the authors’ and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors’ responsibility. Sign up for email updates at