Comments on Epidemics in the New Keynesian model by Eichenbaum, Rebelo, and Trabandt”()

With this paper, Eichenbaum, Rebelo, and Trabandt have made another insightful and influential contribution to the growing literature on the macroeconomics of epidemics. Their papers are paving the way to a new fascinating research program whose objective is to develop empirically plausible macroeconomic models of epidemics. I argued that estimating synthetic COVID shocks in familiar DSGE models provides a good benchmark to evaluate progress toward this goal (Ferroni et al., 2021). Furthermore, evaluating alternative containment measures and how these measures should be deployed (e.g., should containment measures be targeted to the workplaces or somewhere else?) are important matters this research agenda should address. My work with Rottner (Melosi and Rottner, 2020) contributes to developing methods allowing researchers to study contact tracing and testing in macro-epidemiological models of the type studied in Eichenbaum, Rebelo, and Trabandt’s influential works.