The SEI Epidemic-Macroeconomic Model explained

It is a computer program that is a free open-source tool for government planners to consider the potential economic impact of the pandemic and the measures put into effect to limit the spread of Covid-19. It has a built-in simulation model that allows analysts to assess the implications of a wide range of possible futures or “planning scenarios” that take into account pandemic-related economic and public health issues and measures.

Planners can consider the impact of the global economic slowdown on tourist demand, and on demand for their country’s exports. The model also allows planners to represent the sequence of public health responses to Covid-19 that their country has introduced or is considering – measures such as lockdowns, closing airports, social distancing and so on. They can say how strongly those public health measures affect demand – for example, for restaurants or hospitals. The model then simulates the impact on the whole economy.

Our understanding of the pandemic and predictions of the future will continue to evolve as new variants emerge and we learn more about their epidemiological characteristics. But we have designed the software to be flexible so that it can handle new strains, reinfections after vaccination or previous infection, and waning immunity. The example included in the software simulates two variants, including the emergence of Delta in the spring of 2021. Planners can also adjust inputs to simulate the spread of Omicron too as more data become available. In fact, the tool could be used to simulate contagious diseases other than Covid-19 in the future.

During the pandemic, users of SEI’s LEAP tool began asking SEI for assistance with developing Covid-19-adjusted economic baselines to do their planning. We developed a tool based on an earlier model developed by one of the team members to meet that need.

The new software is intended to be used by planners in lower- and middle-income countries. Over two-thirds of registered LEAP users are from these countries. Their technical staffs often have high demands placed on them. LEAP, along with SEI’s water planning software WEAP, is available to most of those countries at no cost, so combining those tools with the “Epi-Macro” Model helps to overcome some of the resource constraints and allows them to carry out their own analyses.

Covid-19-adjusted economic baselines will keep national energy, water, and other planning scenarios more realistic. Strictly speaking, they can do this even without the “Epi-Macro” software. National economic planning departments, think tanks, and academics could generate modified economic baselines. However, if  those agencies were asked to focus on the impacts of Covid-19, they would likely focus on specific interventions or impacts rather than on providing inputs for long-run planning exercises. In this respect, the new model fills a gap.