Abstract

MELLACHER, Patrick. What if Merkel had acted like Johnson against COVID-19?. Inv. Econ [online]. 2021, vol.80, n.317, pp.82-108.  Epub Sep 19, 2021. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2021.317.79301.

The first wave of COVID-19 infections had a heterogeneous impact on European countries with respect to public health and economic outcomes. Germany and the United Kingdom (UK) stand out in particular, as the UK fared much worse in both dimensions. I study whether these differences can be attributed to a “smarter” German containment policy using the COVID-Town economic-epidemiological agent-based model. After calibrating the model to a German baseline scenario, I show that a British containment policy scenario can accurately predict the UK number of deaths per capita. Furthermore, the UK scenario is associated with higher economic and social costs. The differences can largely be attributed to COVID-19 testing capacities and policy timing. While timing is associated with the known trade-off between public health and economic/social outcomes, increased testing can reduce deaths and increase Gross Domestic Product (GDP) simultaneously.

Keywords : Economic epidemiology; pandemic; agent-based macroeconomics; complexity economics; non-pharmaceutical interventions.