  We propose a model, which nests a susceptible-infected-recovered-deceased
(SIRD) epidemic model into a dynamic macroeconomic equilibrium framework with
agents' mobility. The latter affect both their income and their probability of
infecting and being infected. Strategic complementarities among individual
mobility choices drive the evolution of aggregate economic activity, while
infection externalities caused by individual mobility affect disease diffusion.
The continuum of rational forward-looking agents coordinates on the Nash
equilibrium of a discrete time, finite-state, infinite-horizon Mean Field Game.
We prove the existence of an equilibrium and provide a recursive construction
method for the search of an equilibrium(a), which also guides our numerical
investigations. We calibrate the model by using Italian experience on COVID-19
epidemic and we discuss policy implications.
