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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)

Sergio Rebelo

Date Published

2020

Citations

Rebelo, Sergio. 2020. The Macroeconomics of Testing and Quarantining.

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