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The policy maker understands the economy is in a pandemic (pt > 0). The policy maker also understands the decision problem of the worker and
The policy maker understands the economy is in a pandemic (pt > 0). The policy maker also understands the decision problem of the worker and of the firm, and observes actual quantity of employed labor Lt and prevailing wage wt . However, the policy maker does not exactly know pt , and does not know whether the prevailing wage wt is above the market clearing wage wt or not
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