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Covid‐19 Control and the Economy: Test, Test, Test

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  • Abderrahim Taamouti

Abstract

Hard lockdowns have left policymakers to face the ethical dilemma of choosing between saving lives and saving the economy. However, massive testing could have helped to respond more effectively to Covid‐19 crisis. In this paper, we study the trade‐off between infection control, lockdown and testing. The aim is to understand how these policies can be effectively combined to contain Covid‐19 without damaging the economy. An extended SIR epidemic model is developed to identify the set of testing and lockdown levels that lead to a reproduction number below one, thus to infection control and saving lives. Depending on whether the testing policy is static or dynamic, the model suggests that testing 4% to 7% of the population is the way to safely reopen the economy and the society.

Suggested Citation

  • Abderrahim Taamouti, 2021. "Covid‐19 Control and the Economy: Test, Test, Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(5), pages 1011-1028, October.
    • Handle: RePEc:bla:obuest:v:83:y:2021:i:5:p:1011-1028
    DOI: 10.1111/obes.12442
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    References listed on IDEAS

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    1. Jean-Marie Dufour & Mohamed Taamouti, 2005. "Projection-Based Statistical Inference in Linear Structural Models with Possibly Weak Instruments," Econometrica, Econometric Society, vol. 73(4), pages 1351-1365, July.
    2. Bandyopadhyay, Siddhartha & Chatterjee, Kalyan & Das, Kaustav & Roy, Jaideep, 2021. "Learning versus habit formation: Optimal timing of lockdown for disease containment," Journal of Mathematical Economics, Elsevier, vol. 93(C).
    3. David Berger & Kyle Herkenhoff & Chengdai Huang & Simon Mongey, 2022. "Testing and Reopening in an SEIR Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 43, pages 1-21, January.
    4. Dufour, Jean-Marie & Jasiak, Joann, 2001. "Finite Sample Limited Information Inference Methods for Structural Equations and Models with Generated Regressors," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 815-843, August.
    5. David Berger & Kyle Herkenhoff & Chengdai Huang & Simon Mongey, 2022. "Testing and Reopening in an SEIR Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 43, pages 1-21, January.
    6. Jean-Marie Dufour, 1997. "Some Impossibility Theorems in Econometrics with Applications to Structural and Dynamic Models," Econometrica, Econometric Society, vol. 65(6), pages 1365-1388, November.
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