Alberto Bisin, Andrea Moro, 20 February 2022

The dynamics of a pandemic like Covid-19 depends crucially on various dimensions of heterogeneity in the population, notably on its demographic structure and on its spatial distribution. This column shows that (1) local herd immunities induced by the spatial structure of the population along socio-demographic dimensions substantially affect the effectiveness of various non-pharmaceutical interventions; and that (2) in this context, policies naively ignoring agents’ and firms’ behavioural responses (hence exposed to a Lucas critique argument) have substantial costs in terms of their effectiveness in containing the pandemic.

Raphaël Lafrogne-Joussier, Julien Martin, Isabelle Mejean, 05 February 2022

Global supply chains have been central in economic and policy debates since the start of the Covid-19 pandemic. This column uses the first lockdown in China in 2020 to study how firms involved in global value chains can help mitigate the effects of supply disruptions. Using monthly data on French firms, it finds that inventory management helped firms mitigate the shock, but the geographic diversification of input sourcing did not. Governments may thus consider giving incentives to firms to depart from just-in-time production processes, especially for those engaged in the production of critical products. 

Alan Auerbach, Yuriy Gorodnichenko, Peter B. McCrory, Daniel Murphy, 23 December 2021

The Covid-19 pandemic prompted an unprecedented fiscal stimulus by many governments to counter the economic recession. This column uses high-frequency data on government spending, lockdown restrictions, and economic indicators in the US to assess the effectiveness of fiscal policy. It shows that government spending increased employment, but only in cities not subject to strict stay-at-home restrictions. It also shows that consumer spending shifted strongly toward durable goods during the pandemic. Well-targeted fiscal measures will be crucial in the case of another recessionary outbreak, especially transfers to firms on the brink of exit. 

Dan Anderberg, Helmut Rainer, Fabian Siuda, 20 November 2021

Concerns that domestic violence would intensify during the COVID-19 lockdowns were not borne out by early research. But that research relied on police records. This column suggests that studies based solely on police-recorded incidents of domestic violence provide a less accurate picture than sources less susceptible to changes in reporting behaviour. Based on internet search activity, the authors find a 40% increase in domestic violence incidents in London during the lockdowns – seven to eight times larger than estimates relying on police data alone.

Ulugbek Aminjonov, Olivier Bargain, Tanguy Bernard, 09 October 2021

In many countries, poorer people have been more exposed to Covid-19 as they cannot afford to stay at home instead of going to work. This column shows that in low- and middle-income countries, emergency income support schemes have significantly reduced differences in rates of contagion due to wealth or poverty status by allowing poorer people to also stay at home. As well as preserving livelihoods and alleviating poverty, income support has also been successful in curbing the spread of Covid-19.

Sebastian Barnes, Robert Hillman, George Wharf, Duncan MacDonald, 16 July 2021

As the economy locked down in March 2020, businesses across the UK struggled to operate. And yet, fewer firms declared bankruptcy during the pandemic than in preceding years. This column introduces a model designed to examine the economic impact of Covid-19. It determines that government assistance rescued previously profitable firms that might not have survived lockdowns, but also propped up weaker firms that would have failed in normal times. The difficulties in effectively targeting aid justifies the expansive support distributed during the crisis.

Megha Patnaik, Andrea Lamorgese, Andrea Linarello, Fabiano Schivardi, 01 May 2021

In response to COVID-19, firms had to adapt to nationwide lockdowns and social distancing measures with little to no prior experience. This column examines the role of management in firms’ responses to the pandemic in Italy, the first western country to be badly hit by the outbreak, and finds that firms with structured management practices experienced lower declines in performance during the post-lockdown period. These firms were more likely to adopt labour-related strategies in response to the lockdown, including transitions to remote work.

Patricio Goldstein, Eduardo Levy Yeyati, Luca Sartorio, 30 March 2021

Non-pharmaceutical interventions have been key to containing the impact of the COVID-19 pandemic. This column examines whether the effectiveness of lockdowns on the virus’s spread and death toll has changed over the past year, using data from 152 countries from the onset of the pandemic through 31 December 2020. Initially, lockdowns are associated with a significant reduction in the spread of the virus and the number of related deaths, but this effect declines over time. Lockdown does not work as a continuous containment policy in the event of a protracted pandemic.

Peter A.G. van Bergeijk, 18 March 2021

The COVID-19 pandemic is the first time in history that closing entire economies has been used as a medical tool, simultaneously and worldwide. This column argues that such ‘pandonomics’ cannot be repeated during future pandemics that are sure to come – the costs are too heavy. Since lockdowns are very costly, future economic non-pharmaceutical interventions need to be designed more intelligently, helping the economy to restructure and support the transition from a basically ignorant and domestically oriented society into a pandemic-aware one.

Dirk Niepelt, Martín Gonzalez-Eiras, 11 January 2021

Infection externalities are a key feature of the Covid-19 pandemic, as individuals fail to account for the full consequences of their actions. This column develops a model of infection dynamics and economic choices and studies the resulting optimal policy outcomes. Under a scenario of the pandemic ending deterministically following an effective vaccination campaign, the model suggests that countries whose vaccination campaigns are proceeding quickly should impose a strict lockdown, while countries whose campaigns will not be completed within a few months should not impose a lockdown at all. In contrast, if the appearance of a cure is more ‘stochastic' – for example, if the virus mutates further or the vaccines turn out to be less effective than hoped – optimal policy calls for alternating between lockdowns and ‘inverse lockdowns’, with the latter stimulating social interaction.

Balázs Égert, Yvan Guillemette, Fabrice Murtin, David Turner, 02 January 2021

Policymakers have faced a crucial trade-off between curbing the spread of the Covid-19 pandemic and minimising further damage to economic activity. Employing reduced form econometric estimates of the Covid-19 pandemic, this column seeks to quantify the impact of government interventions on disease progression and mobility. It finds that a wide-ranging package of public health policies – including comprehensive testing, tracing and isolation, mask-wearing, and policies directed at vulnerable people in care homes – are crucial to avoid full lockdowns while also containing the spread of the virus. Such policies may, however, need to be complemented by selective containment measures such as restricting large public events and international travel or localised lockdowns. 

Lukas Kleine-Rueschkamp, Cem Özgüzel, 09 December 2020

Workers in essential services have been crucial during COVID-induced lockdowns. This column assesses the contribution of migrants to ‘key worker’ occupations across regions in 31 European countries. Based on individual-level data on occupations from the EU labour force survey and the European Commission’s definition of key workers, it shows that migrants are as likely to support regional economies in key worker occupations as native-born workers are. However, within countries, large differences exist across regions and between cities and rural areas. Overall, migrants play an especially important role in low-skilled key occupations and in cities. At the same time, they also provide a vital source of labour supply in skilled jobs critical for European healthcare systems, such as doctors and nurses.

Matthew Spiegel, Heather E. Tookes, 07 December 2020

As the COVID-19 pandemic continues worldwide, policymakers are still grappling with the question of which non-pharmaceutical policy interventions are effective. In the US, state and county policies varied widely, as did the growth in fatalities due to COVID-19. This column examines US business policies to help shed light on which policies save more lives. Stay-at-home orders, mandatory mask requirements, beach and park closures, restaurant closures, and high-risk (Level 2) business closures most consistently predict lower fatality growth four to six weeks ahead. Closures of low- and medium-risk businesses do not appear effective and, despite their costs, may even be counterproductive.

Barbara Baarsma, Eline van den Broek-Altenburg, Robin Fransman, Bas Jacobs, Carl Koopmans, Coen Teulings, 04 December 2020

The aim of the Dutch government’s current policy to combat COVID-19, as in many other countries, is to reduce the number of infections as much as possible. This column argues that recent data show that societies can handle a much larger number of infections during this second wave without excessive social costs, and that the Dutch policy should therefore move away from almost eliminating infections towards creating herd immunity by letting the COVID-19-virus circulate more freely among the non-vulnerable groups, while strictly protecting the vulnerable groups.

Miltos Makris, Flavio Toxvaerd, 24 November 2020

The prospect of an effective vaccine to Covid-19 in the near term makes it important to understand private and public incentives to suppress infection. This column examines how the prospect of a vaccine alters individuals’ incentives to self-protect between now and the arrival of the vaccine, and how a benevolent social planner would prefer individuals to self-protect. It finds that individuals tend to ramp up self-protection in anticipation of the vaccine, while the social planner manages the transition by introducing stricter suppression at early stages.

Claudia Hupkau, Barbara Petrongolo, 23 November 2020

The second lockdown in the UK is raising many questions about the impact on the economy and on society more broadly, including the implications for gender equality in the workplace and at home. This column uses household survey data to show that at the start of the pandemic in the UK, men were slightly more likely than women to be furloughed and to experience earnings losses, but by late summer the gender differential in furlough rates had reversed. Women also provided for a larger share of increased childcare needs on average, although in an important share of households, fathers became the primary childcare providers during the first lockdown. Sectors with a large share of female employment are now subjected to the second lockdown. These changes may have longer-term consequences on gender inequalities if they eventually reshape the reorganisation of work and family life.

Francesca Caselli, Francesco Grigoli, Weicheng Lian, Damiano Sandri, 16 November 2020

Non-pharmaceutical interventions remain key to slow the spread of the COVID-19 pandemic. This column examines the impact of lockdowns on mobility in a large number of countries during the first seven months of the pandemic. Both lockdowns and voluntary social distancing helped contain the first wave of COVID-19. In particular, stringent and rapidly adopted lockdowns significantly slowed the spread of the virus. Despite their short-term economic costs, early and tight lockdowns may pave the way to a faster recovery.

Sonia Bhalotra, 13 November 2020

There has been a global surge in domestic violence since the onset of Covid-19. This column provides insights into what may be driving this rise, drawing on evidence from Brazil. Job loss leads to increases in domestic violence, irrespective of whether it is the perpetrator or victim whose job is lost. Both income stress and an increase in time spent together seem to contribute to this. Unemployment benefits have mitigation potential if they can be supplemented by policies designed to encourage a return to work. 

Marcella Alsan, Luca Braghieri, Sarah Eichmeyer, Minjeong Joyce Kim, Stefanie Stantcheva, David Yang, 13 November 2020

The COVID-19 pandemic offers an example of how two core government functions – the protection of civil liberties and the provision of public goods – can come into conflict. This column reports on a large-scale representative survey administered to more than 400,000 people in 15 countries which shows that a large fraction of people around the world are willing to sacrifice their own rights and freedoms in order to improve public health conditions during the COVID-19 pandemic. Citizens’ support, however, is likely to be heterogeneous and depends on their own exposure to COVID-19 health risk, as well as on how much they fear the erosion of their civil liberties.

Nicola Fuchs-Schündeln, Dirk Krueger, Alexander Ludwig, Irina Popova, 12 November 2020

According to the World Bank, around 1.6 billion school children were affected by Covid-related school and childcare centre closures at their peak. This column uses a model that features public schooling as an input into the human capital production of children, as well as the monetary and time investment of parents into their children. The results suggest that school and childcare closures have significant negative long-term consequences on the human capital and welfare of the affected children, especially those from disadvantaged socioeconomic backgrounds. The loss in schooling and associated human capital accumulation is harder to offset the longer the crisis lasts.

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