Restarting the economy while saving lives under Covid-19

We provide, calibrate and test a realistic model of the spread of SARS-Cov-2 in an economy where the population has different age groups and sectors. The model takes into account factors that have proved to be essential in explaining features of the effect of the epidemic, in particular the constraint in the number of Intensive Care Units available in a region and the different response to the epidemic of individuals of different ages. We characterize the policies of containment of the epidemic that are efficient with respect to important outcomes such as number of fatalities and GDP loss. Our main finding is that prudent policies of gradual return to work even in the short period, may save many lives with limited economic costs, as long as a threshold is not reached. Further attempts to reduce fatalities beyond this threshold cause GDP losses that become extremely large. The policies that allow this safe return to productive activity are a combination of selection criteria of individual allowed to return to work on the basis of age and risk of the sector in which they are employed.