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Research Details
The Macroeconomics of Testing and Quarantining
Abstract
Epidemiology models used in macroeconomics generally assume that people know their current health status. In this paper, we consider a more realistic environment in which people are uncertain about their health status. We use our model to study the impact of testing with and without quarantining infected people. We Önd that testing without quarantines can worsen the economic and health repercussions of an epidemic. In contrast, a policy that uses tests to quarantine infected people has very large social beneÖts. Critically, this policy ameliorates the sharp trade-o§ between declines in economic activity and health outcomes that is associated with broad-based containment policies like lockdowns.
Type
Working Paper
Author(s)
Date Published
2020
Citations
Rebelo, Sergio. 2020. The Macroeconomics of Testing and Quarantining.
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