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Testing as an Approach to Control the Corona Epidemic Dynamics and Avoid Lockdowns

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  • Thomas Gries

    (Paderborn University)

  • Paul Welfens

    (University of Wuppertal)

Abstract

Vaccinations, lockdowns and testing strategies are three potential elements of an effective anti-coronavirus, and in particular Covid-19, health policy. The following analysis considers - within a simple model - the potentially crucial role of a Corona testing approach in combination with a quarantine approach which is shown herein to be a substitute for broad lockdown measures. The cost of lockdowns/shutdowns are rather high so that – beyond progress in terms of a broad vaccination program – a rational testing strategy should also be carefully considered. Testing has to be organized on the basis of an adequate testing infrastructure which could largely be implemented in firms, schools, universities and public administration settings. As regards the cost of a systematic broad Covid-19 testing strategy, these could come close to 0.5 percent of national income if there are no vaccinations. The Testing & Quarantine approach suggested here – with tests for symptomatic as well as asymptomatic people - is based on a random sampling and would require rather broad and frequent testing; possibly one test per person every 7-10 days. At the same time, one should consider that the cost of further lockdowns/shutdowns of a duration of one month could be very high, such that a standard cost benefit analysis supports the testing approach suggested herein. Also, an optimal policy mix could be designed where both vaccinations and testing play a crucial role. As of late January 2021, no further lockdowns in Germany and other OECD countries would be necessary if a broad testing infrastructure can be established rather quickly. This in turn will reinforce economic optimism and help to jumpstart economic growth in Europe, the US and Asia in a solid way. The basic logic of the testing approach pointed out here for industrialized countries could also be applied in developing countries. The approach presented is complementary to the IMF analysis of Cherif/Hasanov.

Suggested Citation

  • Thomas Gries & Paul Welfens, 2021. "Testing as an Approach to Control the Corona Epidemic Dynamics and Avoid Lockdowns," Working Papers CIE 139, Paderborn University, CIE Center for International Economics.
  • Handle: RePEc:pdn:ciepap:139
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    References listed on IDEAS

    as
    1. Layard, Richard & Clark, Andrew E. & De Neve, Jan-Emmanuel & Krekel, Christian & Fancourt, Daisy & Hey, Nancy & O'Donnell, Gus, 2020. "When to release the lockdown: a wellbeing framework for analysing costs and benefits," LSE Research Online Documents on Economics 104276, London School of Economics and Political Science, LSE Library.
    2. Lucas Bretschger & Elise Grieg & Paul J. J. Welfens & Tian Xiong, 2020. "COVID-19 infections and fatalities developments: empirical evidence for OECD countries and newly industrialized economies," International Economics and Economic Policy, Springer, vol. 17(4), pages 801-847, October.
    3. Ben Balmford & James D. Annan & Julia C. Hargreaves & Marina Altoè & Ian J. Bateman, 2020. "Cross-Country Comparisons of Covid-19: Policy, Politics and the Price of Life," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 525-551, August.
    4. Reda Cherif & Fuad Hasanov, 2020. "A TIP Against the COVID-19 Pandemic," IMF Working Papers 2020/114, International Monetary Fund.
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    Cited by:

    1. Anna Kristina Witte & Janina Grosch & Beate Conrady & Lena Schomakers & Marcus Grohmann, 2022. "Free PoC Testing for SARS-CoV-2 in Germany: Factors Expanding Access to Various Communities in a Medium-Sized City," IJERPH, MDPI, vol. 19(8), pages 1-16, April.

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    More about this item

    Keywords

    Coroana testing; epidemic; lockdowns; cost pandemic response; world economy;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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