Nicola Fuchs-Schündeln, Moritz Kuhn, Michèle Tertilt, 30 May 2020

The COVID-19 crisis has hit women’s employment particularly hard, partly because the worst-hit sectors have high female employment shares, but also because schools and daycare closures have forced more mothers to leave their jobs. This column looks at Germany, where 26% of the workforce has children aged 14 or younger, and quantifies the macroeconomic importance of working parents. If schools and daycare centres remain closed as the economy slowly reopens, 11% of workers and 8% of all working hours will be lost to the labour market. Policies to restart the economy must accommodate the concerns of these families.

Barthélémy Bonadio, Zhen Huo, Andrei Levchenko, Nitya Pandalai-Nayar, 25 May 2020

Lockdown disruptions to manufacturing and shipping transmit shocks across countries through global supply chains. This column uses a simulation analysis to quantify these impacts and finds that the transmission of foreign lockdowns accounted for one-third of the total Covid-19-related GDP contractions. However, renationalisation of global supply chains is unlikely to help insulate economies from future pandemic-driven lockdowns. The reason is that eliminating reliance on foreign inputs would increase the reliance on domestic inputs. Since a pandemic-related lockdown would also affect domestic input suppliers, there is generally no resilience benefit from renationalising international supply chains.

Luís Santos-Pinto, José Mata, 22 May 2020

Increasing and recurring pleas to return to normality in order to avoid the economic costs of a lockdown rely on the idea that ‘natural’ herd immunity may be achieved by letting Covid-19 spread without measures to contain it. This column discusses key uncertainties associated with Covid-19 and argues that there are substantial benefits in keeping the lockdown in place in order to first learn more about Covid-19 and then decide on the best strategy. This logic is based on option theory which shows that when a strategy has irreversible consequences and there are important uncertainties, there is substantial value in waiting.

Guillaume Chapelle, 20 May 2020

Non-pharmaceutical interventions such as school closures and social distancing were implemented in the US against the spread of the 1918 influenza pandemic. This column explores the effect of these interventions on economic activity and death rates in US cities during and after 1918. The policies lowered the fatality rate during the peak of the pandemic but are associated with a significant rise in the death rate in subsequent years, possibly through reducing herd immunity. Their impact, positive or negative, on the growth of the manufacturing sector in US cities remains an open question.

Gabriele Ciminelli, Sílvia Garcia-Mandicó, 19 May 2020

As many countries around the world are finally past the first peak of the pandemic, it is time to assess what could be done better in case of a second wave. This column analyses the management of COVID-19 in Italy using newly available death registry data covering almost all Italian municipalities. The findings suggest that the closure of non-essential services reduced mortality, while shutting down factories did not. Additionally, within the area of the epidemic epicentre, mortality was up to 50% higher in municipalities far from an ICU, a sign that congestion of the emergency care system may have prevented critical patients from being treated on time.

Guglielmo Briscese, Nicola Lacetera, Mario Macis, Mirco Tonin, 16 May 2020

Many governments have enacted stringent ‘stay-at-home’ policies to mitigate the spread of the COVID-19 pandemic. This column reports evidence from a series of surveys of representative samples of the Italian population on their willingness to comply with the lockdown. The results indicate that people are less compliant if self-isolation measures are extended for longer than expected, which suggests that managing expectations is critical. This finding could be valuable if new waves of infections force governments to re-introduce lockdowns.

Dirk Krueger, 14 May 2020

Do we close our public spaces to protect our communities from Covid-19, or keep them open, as in Sweden? Dirk Krueger tells Tim Phillips that informing the public and then trusting individuals to make good choices might deliver a decline in infections, while minimising the Covid recession.

Download Covid Economics 5, including Dirk's paper.
Picture: Creative Commons/Vogler

Jean-Philippe Platteau, Vincenzo Verardi, 16 May 2020

One puzzle that arises in connection with the spread of Covid-19 is why there is such large variation in infection and death rates both across as well as within countries. This column argues that differences in the way people, and in particular different age groups, interact can explain part of this variation. Simulations show that the measures Belgium would need to take when re-opening its economy would be more moderate if it had the same interaction patterns as Germany, and more strict if it had Italy’s interaction patterns. A key lesson is that there is no one-size-fits-all solution that could be applied to all countries, or even to all regions within a country.

Asger Lau Andersen, Emil Toft Hansen, Niels Johannesen, Adam Sheridan, 15 May 2020

The COVID-19 pandemic has had drastic effects on consumer spending across the world. This column presents evidence based on bank account transaction data from Denmark showing that total card spending was reduced by 25% during the early phase of the crisis. The drop was mostly concentrated on goods and services whose supply is directly restricted by government interventions, suggesting a limited role for spillovers to non-restricted sectors through demand in the short term.

Ayça Tekin-Koru, 14 May 2020

The strict and prolonged age-specific containment measures in Turkey have both reduced infection/death rates and enabled less strict restrictions for the lower-risk groups. This column reviews Turkey’s response and examines the real-time effects of the COVID-19 crisis on production in Turkey. If finds that the targeted containment measures appear to have helped reduce a contraction in production that could have been much worse with a uniform lockdown. It also finds that the major brunt of the health crisis in terms of its human costs has been borne by the working class.

Xiaohui Chen, Ziyi Qiu, 13 May 2020

The COVID-19 pandemic has prompted a vast spectrum of unprecedented government interventions. This column discusses the impact of various interventions on COVID-19 transmission dynamics and the associated economic consequences. Examining the variation in government policies, it finds that policies such as lockdown, school closure, centralised quarantine and mask wearing are effective in controlling the virus transmission. A series of scenario analyses suggest that countries may avoid lockdown by imposing school closures, mask wearing and centralised quarantine simultaneously to reach similar COVID-19 infection mitigation outcomes.

Sam Engle, John Stromme, Anson Zhou, 12 May 2020

Lockdown policies are used to ‘flatten the curve’, but their success rate remains uncertain. This column uses GPS data from mobile phones in the US to show that stay-at-home orders do reduce mobility. However, voluntary reductions are also important, regardless of stay-at-home orders. Counties with a higher share of older people or a lower share of Republican votes are more responsive to lockdown measures. Further, counties with a larger share of jobs that are ‘teleworkable’, a higher median income, or a lower use of public transit are also more responsive, suggesting that multiple factors must be considered.  

Marcus Painter, Tian Qiu, 11 May 2020

Social distancing is vital to mitigate the spread of the novel coronavirus. Leveraging smartphone geolocation data, this column examines how political beliefs impact the effectiveness of state-level social distancing orders in the US. The findings suggest that Republicans and misaligned Democrats are less likely to adhere to social distancing orders. Bipartisan support for social distancing measures thus appears to be a key factor in how quickly we can mitigate the spread of the novel coronavirus.

Jack Leslie, Richard Hughes, Charlie McCurdy, Cara Pacitti, James Smith, Daniel Tomlinson, 11 May 2020

The scale of the economic impact of coronavirus is only starting to become clear, but effective government policy responses depend on realistic estimates of the depth and length of the recession. Drawing on theory, experience from past viral outbreaks, and real-time data, this column presents three scenarios for the UK economy over the next five years. Economic outcomes could easily be worse than many current forecasts. Crucially, the duration and strictness of social distancing restrictions will define the total loss in output during the crisis and influence the likely pace of recovery post-crisis.

Sergio Torrejón Pérez, Marta Fana, Ignacio González-Vázquez, Enrique Fernández-Macías, 09 May 2020

The COVID-19 economic crisis is having a huge impact on employment in the EU, calling for swift policy action targeting the most affected sectors and countries. This column makes an assessment of the labour market impact of the confinement measures put in place by EU governments. It finds that these restrictions are likely to have a very asymmetric effect across EU labour markets, with the most negative employment impact concentrating in the most vulnerable countries and categories of workers.

Ramanand Jeeneea, Kaviraj Sharma Sukon, 09 May 2020

The government of Mauritius responded early to the COVID-19 pandemic with stringent lockdown measures and saw a drastic reduction in new cases. This column examines the Mauritian response and estimates that the measures led to an 80% reduction in the coronavirus transmission rate. A well-implemented and early ‘hard lockdown’ can be effective in managing the spread of COVID-19.

Dimitris K. Chronopoulos, Marcel Lukas, John O.S. Wilson, 06 May 2020

Since the first COVID-19 cases were reported in January 2020, the UK government has introduced successive public health measures, culminating in late March 2020 with enforced closures of non-essential businesses and social distancing. These measures are significantly affecting UK household incomes and expenditures. This column exploits a large anonymised transaction-level dataset covering Great Britain to examine real-time consumer spending responses to the COVID-19 pandemic and related public policy measures. While there are differences by age, gender, and income level, overall consumer spending declined as the government lockdown becames imminent and has continued to decline since.

Miltos Makris, 04 May 2020

Social distancing fits well in the economist’s analytical framework. This column discusses how epidemiological models can be enriched with individual social distancing decisions. Preliminary simulations show how an epidemic could be influenced by the interaction of private decisions and government measures on social distancing. The simulations highlight the importance of including economic insights in epidemiological simulations, rather than serving as forecasts.

Zachary Bethune, Anton Korinek, 03 May 2020

At the centre of the debate on how to deal with the novel coronavirus is whether to aim for containment or herd immunity. A crucial factor in this decision is whether we are guided by individually optimising behaviour or by overall societal welfare, since COVID-19 gives rise to substantial externalities. This column calculates that while individuals perceive the cost of becoming infected to be $80,000 the true social cost is more than three times higher, and argues that public health authorities should use mandatory measures to account for these externalities. To ameliorate the costs of the trade-off, it is crucial to develop sufficient testing and tracing capacity so that untargeted lockdowns and the economic cost involved can be ended. 

Nicolas Ajzenman, Tiago Cavalcanti, Daniel Da Mata, 02 May 2020

Regardless of their scientific soundness, COVID-19 recommendations from political leaders such as President Trump are taken seriously by followers. In Brazil, President Bolsonaro has publicly flaunted social distancing measures and downplayed the seriousness of the disease in at least two well-publicised instances. This column analyses the effects of Bolsonaro’s actions and speeches in the month of March on Brazilians’ social-distancing behaviours, using electoral data and geo-localised mobile phone data from 60 million devices. The findings suggest that social distancing behaviour decreased in municipalities with stronger support for Bolsonaro.

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