  We analyse the economics and epidemiology of different scenarios for a phased
restart of the UK economy. Our economic model is designed to address the unique
features of the COVID-19 pandemic. Social distancing measures affect both
supply and demand, and input-output constraints play a key role in restricting
economic output. Standard models for production functions are not adequate to
model the short-term effects of lockdown. A survey of industry analysts
conducted by IHS Markit allows us to evaluate which inputs for each industry
are absolutely necessary for production over a two month period. Our model also
includes inventory dynamics and feedback between unemployment and consumption.
We demonstrate that economic outcomes are very sensitive to the choice of
production function, show how supply constraints cause strong network effects,
and find some counter-intuitive effects, such as that reopening only a few
industries can actually lower aggregate output. Occupation-specific data and
contact surveys allow us to estimate how different industries affect the
transmission rate of the disease. We investigate six different re-opening
scenarios, presenting our best estimates for the increase in R0 and the
increase in GDP. Our results suggest that there is a reasonable compromise that
yields a relatively small increase in R0 and delivers a substantial boost in
economic output. This corresponds to a situation in which all non-consumer
facing industries reopen, schools are open only for workers who need childcare,
and everyone who can work from home continues to work from home.
