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Testing Policies During an Epidemic

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Abstract
I simulate a stochastic SIR-Macro model to study the effects of different testing policies to isolate and quarantine the infectious during an epidemic. I show that contact tracing performs better than random screenings, and than tests on a voluntary basis, only conditionally on having enough capacity to frequently process a large number of tests. Since the testing capacity is difficult to build in the short run through investments, I study the effects of two alternatives: group testing and the use of less sensitive tests. Both strategies, when combined with contact tracing, can significantly smooth the peak of the epidemic, ease the pressure on hospitals, decrease mortality and reduce the overall output loss. I also show that the gains are higher in case of an endogenous reduction of social activities in response to the epidemic.

Suggested Citation

  • Francesco Flaviano Russo, 2020. "Testing Policies During an Epidemic," CSEF Working Papers 591, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:591
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    File URL: http://www.csef.it/WP/wp591.pdf
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    References listed on IDEAS

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    8. Collard, Fabrice & Hellwig, Christian & Assenza, Tiziana & Kankanamge, Sumudu & Dupaigne, Martial & Werquin, Nicolas & Feve, Patrick, 2020. "The Hammer and the Dance: Equilibrium and Optimal Policy during a Pandemic Crisis," CEPR Discussion Papers 14731, C.E.P.R. Discussion Papers.
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    11. Callum Jones & Thomas Philippon & Venky Venkateswaran, 2021. "Optimal Mitigation Policies in a Pandemic: Social Distancing and Working from Home [A simple planning problem for covid-19 lockdown]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5188-5223.
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    Cited by:

    1. Francesco Flaviano Russo, 2023. "Epidemics and policy: the dismal trade-offs," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 561-588, July.

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    More about this item

    Keywords

    Group-Testing; Tracing; Infection.;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • I1 - Health, Education, and Welfare - - Health
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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