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Dorn F, Khailaie S, Stoeckli M, Binder SC, Mitra T, Lange B, Lautenbacher S, Peichl A, Vanella P, Wollmershäuser T, Fuest C, Meyer-Hermann M. The common interests of health protection and the economy: evidence from scenario calculations of COVID-19 containment policies. Eur J Health Econ 2023; 24:67-74. [PMID: 35306581 PMCID: PMC8934060 DOI: 10.1007/s10198-022-01452-y] [Citation(s) in RCA: 1] [Impact Index Per Article: 1.0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [MESH Headings] [Grants] [Track Full Text] [Subscribe] [Scholar Register] [Received: 06/18/2021] [Accepted: 02/21/2022] [Indexed: 05/03/2023]
Abstract
We develop a novel approach integrating epidemiological and economic models that allows data-based simulations during a pandemic. We examine the economically optimal opening strategy that can be reconciled with the containment of a pandemic. The empirical evidence is based on data from Germany during the SARS-CoV-2 pandemic. Our empirical findings reject the view that there is necessarily a conflict between health protection and economic interests and suggest a non-linear U-shape relationship: it is in the interest of public health and the economy to balance non-pharmaceutical interventions in a manner that further reduces the incidence of infections. Our simulations suggest that a prudent strategy that leads to a reproduction number of around 0.75 is economically optimal. Too restrictive policies cause massive economic costs. Conversely, policies that are too loose lead to higher death tolls and higher economic costs in the long run. We suggest this finding as a guide for policy-makers in balancing interests of public health and the economy during a pandemic.
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Affiliation(s)
- Florian Dorn
- ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Poschingerstr. 5, 81679, Munich, Germany.
- Economics Department, University of Munich, Ludwigstr. 28, 80539, Munich, Germany.
- CESifo Munich, Poschingerstr. 5, 81679, Munich, Germany.
| | - Sahamoddin Khailaie
- Department of Systems Immunology and Braunschweig Integrated Centre of Systems Biology, Helmholtz Centre for Infection Research, Rebenring 56, 38106, Braunschweig, Germany
| | - Marc Stoeckli
- ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Poschingerstr. 5, 81679, Munich, Germany
- Economics Department, University of Munich, Ludwigstr. 28, 80539, Munich, Germany
| | - Sebastian C Binder
- Department of Systems Immunology and Braunschweig Integrated Centre of Systems Biology, Helmholtz Centre for Infection Research, Rebenring 56, 38106, Braunschweig, Germany
| | - Tanmay Mitra
- Department of Systems Immunology and Braunschweig Integrated Centre of Systems Biology, Helmholtz Centre for Infection Research, Rebenring 56, 38106, Braunschweig, Germany
| | - Berit Lange
- Department of Epidemiology, Helmholtz Centre for Infection Research (HZI), Inhoffenstr. 7, 38124, Brunswick, Germany
- German Center for Infection Research (DZIF), Inhoffenstr. 7, 38124, Braunschweig, Germany
| | - Stefan Lautenbacher
- ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Poschingerstr. 5, 81679, Munich, Germany
- Economics Department, University of Munich, Ludwigstr. 28, 80539, Munich, Germany
| | - Andreas Peichl
- ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Poschingerstr. 5, 81679, Munich, Germany
- Economics Department, University of Munich, Ludwigstr. 28, 80539, Munich, Germany
- CESifo Munich, Poschingerstr. 5, 81679, Munich, Germany
| | - Patrizio Vanella
- Department of Epidemiology, Helmholtz Centre for Infection Research (HZI), Inhoffenstr. 7, 38124, Brunswick, Germany
- Chair of Empirical Methods in Social Science and Demography, University of Rostock, Ulmenstr. 69, 18057, Rostock, Germany
| | - Timo Wollmershäuser
- ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Poschingerstr. 5, 81679, Munich, Germany
- Economics Department, University of Munich, Ludwigstr. 28, 80539, Munich, Germany
- CESifo Munich, Poschingerstr. 5, 81679, Munich, Germany
| | - Clemens Fuest
- ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Poschingerstr. 5, 81679, Munich, Germany
- Economics Department, University of Munich, Ludwigstr. 28, 80539, Munich, Germany
- CESifo Munich, Poschingerstr. 5, 81679, Munich, Germany
| | - Michael Meyer-Hermann
- Department of Systems Immunology and Braunschweig Integrated Centre of Systems Biology, Helmholtz Centre for Infection Research, Rebenring 56, 38106, Braunschweig, Germany
- Institute for Biochemistry, Biotechnology and Bioinformatics, Technische Universität Braunschweig, Braunschweig, Germany
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Berlemann M, Jahn V, Lehmann R. Is the German Mittelstand more resistant to crises?: Empirical evidence from the Great Recession. Small Bus Econ (Dordr) 2021; 59:1169-1195. [PMID: 38624811 PMCID: PMC8612385 DOI: 10.1007/s11187-021-00573-7] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [Grants] [Track Full Text] [Figures] [Subscribe] [Scholar Register] [Accepted: 10/06/2021] [Indexed: 04/17/2024]
Abstract
In a globalized world with high international factor mobility, crises often spread quickly over large parts of the world. Politicians carry a vital interest in keeping crises as small and short as possible. Against this background we study whether the type of company of owner-managed SMEs, in Germany well-known as Mittelstand firms, helps increasing an economy's crisis resistance. We study this issue at the example of the Great Recession of the years 2008/2009. Using micro panel data from the ifo Business Survey, we study the comparative performance of Mittelstand enterprises and find supporting evidence for the hypothesis that Mittelstand firms performed more stable throughout the Great Recession than non-Mittelstand firms. We also show that owner-managed SMEs performed significantly better than SMEs and owner-managed large enterprises. Thus, it is rather the combination of firm size and owner-management that leads to more crisis resistance.
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Affiliation(s)
- Michael Berlemann
- ifo Institute - Leibniz Institute for Economic Research at the University of Munich e.V., Poschingerstr. 5, D-81679 Munich, Germany
- Faculty of Economics & Social Sciences, Chair for Political Economy & Empirical Economics, Helmut-Schmidt-University Hamburg, Holstenhofweg 85, D-20039 Hamburg, Germany
| | - Vera Jahn
- Center for Entrepreneurship, Innovation and Transformation, Ruhr-University Bochum, O-Werk, D-44780 Bochum, Germany
| | - Robert Lehmann
- Faculty of Economics & Social Sciences, Chair for Political Economy & Empirical Economics, Helmut-Schmidt-University Hamburg, Holstenhofweg 85, D-20039 Hamburg, Germany
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