Experts across world continue to highlight the need to reopen economies to limit the economic upheaval caused by the Covid-19 pandemic. However, some believe that unless testing capabilities are ramped up, reopening the economy may result in an upsurge in infection rate. A testing ramp up with limited lockdown measures may be the most optimal solution to reopening the economy.
Kaushik Basu, Professor of Economics at Cornell University, shared a chart comparing the mortality rates across various countries. He noted that the mortality rates are so different that emerging economies cannot blindly imitate the economic policies of those implemented by European and North American nations.
Basu added that economic revival will depend on a limited lockdown that will enable the economy to function.
The COVID Crude Mortality Rate differences across nations are so big (see chart) that for emerging economies to blindly imitate Europe & North America in terms of policy is folly, with large economic costs. The need is for a limited lockdown that allows the economy to function. pic.twitter.com/Jdq4gxEU1f
— Kaushik Basu (@kaushikcbasu) May 25, 2020
Axel Mangelsdorf, an economist and consultant, shared a tweet on the testing capabilities of China. The country tested nine million people in ten days at an average of 1.4 million per day, following an upsurge in cases in Wuhan.
Sampled pooling method was used for the mass testing regimen resulting in 180 asymptomatic cases, which were isolated. Despite scepticism regarding the mass testing, China was able to test nine million people in Wuhan. The country eventually plans to test all of the city 11 million people.
9 million #COVID19 tests in 10 days (1.4 M in 1 day)
180 asymptomatic cases found and isolated.
Use of pooled samples.
That's massive testing to contain a potential rebound in Wuhan after reopening.https://t.co/Q2wB5UN3EE by @xinwenfan h/t @leHotz pic.twitter.com/AJ91IZvrCY
— Eric Topol (@EricTopol) May 25, 2020
Barrett Kirwan, senior economist at Amazon.com, shared an article on the need for developing more tests. He noted that considering the level of GDP that is being lost due to the Covid-19 pandemic, more funds should be spent on developing tests.
The article notes that the best strategy to deal with outbreak and relax lockdown measures would be to develop a system of targeted testing. By testing each citizen with a test that costs approximately $20, the total cost would be $6.6bn, which is less than one tenth of the cost of the Cares Act.
— Barrett Kirwan (@barrettkirwan) May 25, 2020
Stephen Koukoulas, an economist, shared an article on the Australian government’s $60bn JobKeeper Payment scheme. The scheme aimed to pay $1,500 per fortnight per employee to businesses that retained their staff and passed on the payment to them. If the business closed or the employees were sacked, they would not receive the payment.
The article noted that though the scheme looked simple, the delay in making the payments forced businesses to sack their employees. The rules and regulations related to the scheme made some businesses ineligible, resulting in its failure.