The Covid-19 pandemic has taken an enormous economic toll on economies worldwide, and the ramifications continue as new strains of the virus emerge, and vaccine supplies and vaccination campaigns struggle to keep pace.

Health services have strained to keep up with the demand for care. Public budgets have struggled to provide financial support for people whose jobs were lost or upended by measures to control the spread of disease. Indeed, the pandemic experience has rewritten the “business as usual” script for governments, the private sector and individual households.

This upheaval raises new challenges for national authorities who are trying to plan for sustainable future development.

To respond to these challenges, SEI has created software to help national planners and policy analysts take assess economic trajectories in light of pandemic-related developments. The SEI Epidemic-Macroeconomic Model is a new tool to help planners explore future scenarios in ways that consider how the pandemic and related public health and policy measures may affect the national economy and the global economic environment. The software gives planners a way to examine potential ramifications for sector-specific outputs, value added and gross domestic product. The tool consists of linked epidemiological and macroeconomic models that generate pandemic-adjusted macroeconomic baseline scenarios.

The simulator enables planners to consider the impacts of key public health measures that may be imposed, such as international travel restrictions, social distancing requirements, isolation of people who show symptoms and/or high-risk populations, testing and tracing protocols and vaccination roll-outs and regimes. The tool also considers regional variations – differences that may occur  in rural and urban settings or in destinations that attract or are seldom affected by international travel.

The epidemiological model in the tool can simulate waning immunity, reinfections, and multiple concurrent disease variants. The published version is set up to simulate a baseline variant resembling the Alpha variant that emerged early on, and the Delta variant that later surfaced. The model can be modified to include new, emerging variants, such as the recent Omicron variant, as more data on the epidemiologic characteristics of the new variant become available.

Scenario models

The “Epi-Macro” software allows planners to generate economic trajectories that can be used as inputs to scenario models, such as SEI’s signature planning tools: the Low Emissions Analysis Platform (LEAP) and the Water Evaluation and Planning System (WEAP). In these tools, household and sectoral resource demands depend on future scenarios of GDP or sectoral value added. While a scenario approach invites a wide range of possible futures, such models typically assume reasonably smooth economic growth, perhaps along “low”, “medium”, or “high” trajectories; they have not previously assumed rare events such as the pandemic. The new software provides a way to explore pandemic-related deviations from these smooth planning trajectories.

Because the Covid-19 pandemic experience has no close parallel in recent times, planning that ensures public health safety and economic well-being is an extremely difficult undertaking. As the past two years have amply illustrated, the trajectory of the pandemic itself is uncertain. The software represents a serious effort to capture some of the economic ramifications of Covid-19 to help low- and middle-income countries in their planning.

The model and the main repository site containing the source code, manual, and technical documentation files are accessed through GitHub.

The Epidemic-Macroeconomic Model is a project of the SEI. Key contributors include Charlotte Wagner, Eric Kemp-Benedict and Anisha Nazareth. The project was made possible by an SEI Rapid Response grant funded by the Swedish International Development Cooperation Agency.