Benjamin Born, Alexander Dietrich, Gernot Müller, 31 July 2020

Sweden stands out from its European peers as the only country that did not impose a lockdown in response to the COVID-19 outbreak. This column uses this peer group to construct a synthetic control unit to approximate a counterfactual lockdown scenario for Sweden lasting from March 18 to May 17. The results suggest the lockdown would have reduced the number of COVID-19 infections by a half and deaths by a third.

Diane Coyle, David Nguyen, 24 July 2020

The Covid-19 lockdown has provided the opportunity to measure the financial value we give to 'free' digital services like social media and Google search. Diane Coyle and David Nguyen tell Tim Phillips what they discovered, and whether this value should be counted in GDP.

Read the paper in Covid Economics 33

Pablo Fajgelbaum, Amit Khandelwal, Wookun Kim, Cristiano Mantovani, Edouard Schaal, 17 July 2020

In implementing lockdowns to combat the spread of Covid-19, policymakers have primarily imposed the same policies uniformly across locations within a city. This column studies optimal dynamic lockdowns within a commuting network, using a framework that integrates canonical spatial epidemiology and trade models and is applied to commuting data from three cities – Daegu, Seoul and New York. It finds that optimal spatial lockdowns generate substantially smaller income losses than uniform lockdowns for a given virus spread.

Cem Özgüzel, Paolo Veneri, Rudiger Ahrend, 15 July 2020

Places differ in the degree to which they can maintain economic activity through remote working in the face of shocks such as the COVID-19 pandemic. This column assesses the capacity of regions in 30 developed economies to shift to remote working during a lockdown. Based on individual-level data on occupations from labour force surveys, it shows that cities – and in particular capitals – typically have a higher share of occupations suitable for remote working. This may offset some of the stronger negative economic impacts of COVID-related policies on cities. Regional disparities in the capacity for remote working also clearly reflect the level of education of the workforce.

David Miles, 13 July 2020

A major policy issue for many governments is how long a lockdown introduced to slow the spread of the COVID-19 virus should be maintained. This column analyses what an assessment of costs and benefits of lockdown imply for how policy should be set in the UK. The question is simple: Has the length of the UK lockdown been warranted and should restrictions now be eased significantly? Using a wide range of scenarios for costs and benefits it appears as though extending the UK lockdown beyond three-months (that is beyond June) was not likely to be optimal.  

Chryssi Giannitsarou, Flavio Toxvaerd, 12 July 2020

We do not yet know whether individuals who recover from COVID-19 can be reinfected. If immunity wanes, the disease will become endemic, in sharp contrast to a model in which recovery confers permanent immunity. This column considers the possibility that immunity is indeed only temporary, and derives a stylised optimal containment policy to reduce the initial wave of contagion and then manage persistent infections. In practice, this means that partial lockdowns and social distancing measures may be the norm for years to come. 

Diane Coyle, David Nguyen, 10 July 2020

Consumer spending patterns changed substantially during lockdown in the UK, as in other countries, with online consumption in general increasing. This column uses findings from a survey of the UK online population conducted before lockdown in late February 2020 and again in May to reveal some large and significant changes in the valuations of goods and services, with some large differences by age and gender. The lockdown has acted as a natural experiment testing the extent to which digital goods and physical goods are substitutes. The changes in valuation may indicate which services will be most valuable, and to which groups, in a post-pandemic world where more activity takes place online. 

Asli Demirgüç-Kunt, Michael Lokshin, Iván Torre, 09 July 2020

Many countries have implemented non-pharmaceutical interventions such as lockdowns as a response to the COVID-19 pandemic. While the economic costs of such measures have been recognized, their size and importance have not yet been fully assessed. This column analyses high-frequency proxies of economic activity and suggests that lockdowns led to a decline of about 10% in economic activity across Europe and Central Asia. On average, countries that implemented lockdowns in the early stages of the pandemic are found to have better short-term economic outcomes and lower cumulative mortality.

Stefan Thewissen, Duncan MacDonald, Christopher Prinz, Maëlle Stricot, 08 July 2020

Paid sick leave is an important policy for protecting workers and their communities during a pandemic, serving not only to preserve jobs and incomes but also to contain the spread of the virus. This column examines how different countries implemented paid sick leave during the COVID-19 crisis. Evidence suggests such policies will facilitate an orderly end to lockdowns – and sustain workers during subsequent waves of infection – but only if temporary extensions are kept in place and broadened to include those workers currently denied coverage.

Chen Chen, Sudipto Dasgupta, Thanh Huynh, Ying Xia, 08 July 2020

Stay-at-home orders, when effective, can save both lives and the economy. Even though the short-term economic impact is very significant, not getting the pandemic under control can impose even higher economic costs in the future. This column studies the market reactions following staggered lockdown events across US states during Covid-19. It finds that returns on firms located in lockdown states are higher following the lockdown. These reactions can be interpreted as reflecting updated beliefs of market participants in the light of events that follow the lockdowns, such as compliance with stay-at-home orders.

Apostolos Davillas, Andrew M Jones, 30 June 2020

The economic and policy response to COVID-19 has created specific gradients in both exposure to the disease itself and in exposure to the economic impact of the lockdown. This column uses survey data to show that inequality in psychological distress has increased since the pandemic in the UK. However, the proportion of inequality explained by observed individual circumstances has decreased. Pre-pandemic, the largest contributors were financial, employment and housing conditions. By April 2020, age and gender accounted for a larger share, through the impact of the pandemic on mental wellbeing among young people. Working in COVID-affected industries, household composition and parental occupation have also increased their association with the inequality in psychological distress. 

Titan Alon, Minki Kim, David Lagakos, Mitchell VanVuren, 26 June 2020

The COVID-19 pandemic has led to dramatic policy responses in most advanced economies, and in particular sustained lockdowns matched with sizable transfers to workers. This column discuss the extent to which developing countries should try to replicate these policies. Due to differences in labour market informality, fiscal capacity, healthcare infrastructure, and demographics, blanket lockdowns appear less effective in developing countries. Age-targeted policies – where the young are allowed to work while the old are shielded from the virus – can potentially save both more lives and livelihoods.

Supriya Garikipati, Uma Kambhampati, 21 June 2020

The effectiveness of female leaders in handling the COVID crisis has received a lot of media attention. This column examines whether the gender of the national leader truly makes a significant difference to the number of COVID-19 cases and deaths in the first quarter of the pandemic, with differences in lockdown timing examined as a plausible explanation for these patterns. The findings show that COVID outcomes are systematically better in countries led by women. Insights from behavioural studies and leadership literature are used to speculate on the sources of these differences, as well as on their implications. 

Alina Kristin Bartscher, Sebastian Seitz, Sebastian Siegloch, Michaela Slotwinski, Nils Wehrhöfer, 18 June 2020

In the absence of viable medical responses to combat the ongoing Covid-19 pandemic, policymakers have appealed to the social responsibility of their citizens to comply with social distancing rules. This column explores how regional differences in social capital can affect the spread of Covid-19, focusing on seven European countries. The results suggest that areas with high social capital registered between 12% and 32% fewer Covid-19 cases from mid-March until mid-May. A case study of Italy validates the independent role of social capital, showing a consistent reduction in excess deaths and documenting a reduction in mobility prior to the lockdown as a mediating channel.

Lars Jonung, 18 June 2020

The Swedish policy response to Covid-19 is exceptional by international comparison. This column explains how the approach is decided by three articles in the Swedish constitution. The first guarantees the freedom of movement for Swedish citizens, ruling out nationwide lockdowns. The second establishes unique independence for public agencies, allowing them to design the policy response to the pandemic. The third grants exceptional powers to local government. In addition, the Swedish approach is fostered by strong trust in the government.

Scott Baker, R.A. Farrokhnia, Michaela Pagel, Steffen Meyer, Constantine Yannelis, 17 June 2020

After a steep decline in spending, US households responded rapidly to the receipt of COVID-19 stimulus payments. Still, relative to similar programs in 2001 and 2008, spending on durables decreased. This column uses high-frequency transaction data to analyse consumption responses to shelter-in-place orders and government-issued stimulus checks across income levels and locations. It shows that larger increases in spending on food and payments – from credit cards to rents and mortgages – reflect a short-term debt overhang and suggest that direct payments failed to stimulate aggregate consumption.

Pragyan Deb, Davide Furceri, Jonathan D. Ostry, Nour Tawk, 17 June 2020

Containment measures to halt the spread of the 2019 coronavirus pandemic entail large short-term economic costs. This column attempts to quantify these effects using daily global data on real-time containment measures and daily indicators of economic activity. Over a 30-day period from implementation, containment measures have, on average, led to a loss of about 15% in industrial production. Macroeconomic policy measures have however mitigated some of these economic costs. Stay-at-home requirements and workplace closures are most effective in curbing both infections and deaths but are also associated with the largest economic costs.

Pedro Brinca, Joao B. Duarte, Miguel Faria e Castro, 17 June 2020

Recent academic discussions have sought to understand whether the economic impact of the COVID-19 crisis and associated lockdown should be ascribed to demand or supply shocks. This debate is of some importance since the underlying shock can have significant implications for stabilisation policy. This column tries to answer these questions by using data on hours worked and wages to estimate labour demand and supply shocks for the aggregate economy and for different sectors through an econometric model. It finds that while labour supply shocks accounted for a larger share of the fall in hours, both shocks were important.

Almudena Sevilla, Sarah Smith, 16 June 2020

The closure of schools and nurseries during the current pandemic has led to a huge burden of additional childcare for parents. This column discusses how survey data collected at the beginning of May 2020 that asked about employment and childcare pre- and post-COVID to shows that women have borne the majority of this burden and many have been left juggling work and childcare. However, fathers have also increased the time they spend on childcare and, when they are not working, there is an equal allocation.

Juan C. Palomino, Juan Gabriel Rodríguez, Raquel Sebastian, 16 June 2020

Enforced social distancing and lockdown measures to contain COVID-19 restrict economic activity, especially among workers in non-essential jobs who cannot ‘telework’. These have implications for inequality and poverty. This column analyses the capacity of individuals in 29 European countries to work under lockdown and the potential impact of a two-month lockdown on wages and inequality levels. There will be substantial and uneven wage losses across the board and poverty will rise. Inequality within countries will worsen, as it will between countries although to a lesser extent.



Vox Talks


CEPR Policy Research