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Pandemic recessions and contact tracing

Leonardo Melosi and Matthias Rottner

No 34/2021, Discussion Papers from Deutsche Bundesbank

Abstract: We study contact tracing in a new macro-epidemiological model in which infected agents may not show any symptoms of the disease and the availability of tests to detect asymptomatic spreaders is limited. Contact tracing is a testing strategy that aims to reconstruct the infection chain of newly symptomatic agents. We show that contact tracing may be insufficient to stem the spread of infections because agents fail to internalize that their individual consumption and labor decisions increase the number of traceable contacts to be tested in the future. Complementing contact tracing with a timely, moderate lockdown corrects this externality, allowing policymakers to buy time to expand the testing scale so as to preserve the testing system. If the testing capacity is sufficiently large, contact tracing alone can halt the spread of the virus because it allows policymakers to allocate tests along the reconstructed infection chains. We provide theoretical underpinnings to the risk of becoming infected in macro-epidemiological models. Our methodology to reconstruct infection chains is not affected by curse-of-dimensionality problems.

Keywords: Contact tracing; testing; quarantine; externality; infection chain; lockdown; epidemics; SIR-macro model; COVID-19 (search for similar items in EconPapers)
JEL-codes: D62 E10 I10 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-mac
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https://www.econstor.eu/bitstream/10419/243147/1/1772548219.pdf (application/pdf)

Related works:
Journal Article: Pandemic Recessions and Contact Tracing (2023) Downloads
Working Paper: Pandemic Recessions and Contact Tracing (2020) Downloads
Working Paper: Pandemic Recessions and Contact Tracing (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdps:342021

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