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.

ChaeWon Baek, Peter B. McCrory, Todd Messer, Preston Mui, 30 April 2020

Stay-at-home orders have been imposed in many countries to flatten the COVID-19 pandemic curve, but it’s not clear how much economic disruption is caused directly by the orders and how much by the coronavirus. This column disentangles the two by comparing the implementation of stay-at-home policies across the US and high-frequency unemployment insurance claims. The direct effect of stay-at-home orders accounted for a significant but minority share of the overall rise in unemployment claims; unemployment would have risen even without such orders. So long as the underlying public health crisis persists, undoing stay-at-home orders will only bring limited economic relief.

Alice Mesnard, Paul Seabright, 01 May 2020

Lockdowns imply the costly confinement of many healthy individuals for each infected person. Digital apps on smartphones can reduce this cost, but discussion has focused on contact-tracing apps. In addition to familiar security concerns, these can be exploited maliciously in order to disrupt activity or impose quarantine on rivals. This column proposes instead ‘Activity Apps’, which have modest data requirements and less disruptive potential, but can match individuals to activities in ways that may substantially reduce the costs of controlling Covid-19.

Miklós Koren, Rita Peto, 29 April 2020

Social distancing interventions can be effective against epidemics, but they are potentially detrimental to the economy. Businesses that rely on face-to-face communication or close physical proximity when producing a product or providing a service are particularly vulnerable. This column provides theory-based measures of the reliance of US businesses on human interaction, detailed by industry and geographic location. Retail, hotels and restaurants, arts and entertainment and schools are the most affected sectors. The results can help target fiscal assistance to businesses that are most disrupted by social distancing.

Uri Alon, Eran Yashiv, 27 April 2020

Countries are facing stark choices between ending the lockdown to revive people’s lives and risking the ravages of the COVID-19 pandemic. This column proposes an exit strategy from lockdown based on a vulnerability in the coronavirus transmission mechanism, i.e. the latent period in which most infected people do not infect others. An optimal work/lockdown cycle based on this weak spot could minimise infection risks while greatly improving the painful trade-offs faced by policymakers.

Teresa Barbieri, Gaetano Basso, Sergio Scicchitano, 27 April 2020

Many countries are now designing exit strategies from the sectoral lockdowns put in place to contain the outbreak of Covid-19. This column provides new evidence from Italy on the degree of workplace risk of exposure to the virus. Unsurprisingly, the health sector is the most exposed to diseases and infections, while the services sector is the most risky in terms of physical proximity. These and other findings can help in deciding which activities to reopen first and where to reinforce security measures.

Andrew Scott, Jonathan Old, 27 April 2020

COVID-19 is the first pandemic to since the world’s population consisted of more people aged over 65 than under five. Given that COVID-19 fatality rates rise sharply with age, that substantially affects the number of people at risk and the gains from social distancing. This column reveals that adjusting for change in the age structure and longevity of the US, the value of social distancing today is more than three times its corresponding 1920 value. Ageing societies and longer lives support considerably longer economic shutdowns compared to past pandemics.  

Jonathan Heathcote, Andrew Glover, Dirk Krueger, Víctor Ríos-Rull, 26 April 2020

Large portions of many countries’ economies have been shuttered to slow the spread of COVID-19. Why, three months into the pandemic, does the optimal policy response remain so controversial? This column examines how the welfare effects of shutdown policies vary across different types of households. The model predicts that some groups – young workers in sectors deemed non-essential – would benefit from ending the current shutdown, while others – the old – will surely lose. Current disagreements over when to end shutdowns are thus easy to understand.

Miquel Oliu-Barton, Bary Pradelski, Luc Attia, 25 April 2020

A wide range of social distancing and confinement measures have been implemented globally to reduce the spread of Covid-19. Returning to normality is the next challenge. This column proposes a lockdown exit strategy based on two key elements: identifying ‘green zones'; and then progressively joining them together once it is safe to do so. The zoning approach provides a safe, tractable and efficient way of rebuilding our social and economic interactions. While exponential growth works against us during the spread of the virus, it can also work for us to create a safe future.

Thorsten Beck, Wolf Wagner, 24 April 2020

While COVID-19 is a global pandemic, the policy responses so far have been almost exclusively national. This column uses a theoretical model to analyse national containment policies in an integrated world. The findings suggest that the first-best solution is global coordination on public health responses, including domestic containment policies. In the absence of ability to coordinate on the global level, regional coordination is called for.

Claudia Hupkau, Barbara Petrongolo, 22 April 2020

The social distancing and lockdowns associated with the COVID-19 crisis has hit service sectors with frequent interactions between consumers and providers which cannot be done from home. At the same time, it has added education and childcare services to pre-existing home production needs.  This column combines survey data from the UK with occupation classifications to show that that – unlike previous recessions – the current crisis is harming women’s labour market prospects more than those of men and that women are also likely to be on the receiving end of the bulk of increased home production requirements.

Alexis Akira Toda, 21 April 2020

The COVID-19 epidemic will not end until populations acquire herd immunity either because a vaccine is developed or a sufficiently large share of the population has been infected and recovered. This column argues that the draconian mitigation measures currently taken by many governments may be suboptimal because they prevent the building of herd immunity while incurring significant economic costs. A more targeted approach, such as that of Sweden or ‘optimally delayed mitigation’, may be preferable.

Nils Karlson, Charlotta Stern, Daniel Klein, 20 April 2020

Sweden has largely bucked the lockdown trend, leaving much to the discretion of individual citizens. This column offers an account of some of the institutional and cultural underpinnings of Sweden’s COVID regime, and attempts to explain why the country has opted for a relatively permissive approach.

Titan Alon, Matthias Doepke, Jane Olmstead-Rumsey, Michèle Tertilt, 19 April 2020

The lockdowns triggered by COVID-19 are taking a disproportionate toll on women in the labour market, as the sectors with high rates of female employment are experiencing heavier job losses while increased childcare needs during school closures exert an outsized impact on working mothers. Still, this column finds reason to hope that by promoting flexible work arrangements and putting the childcare obligations of both genders into plain sight, the crisis may reduce labour-market barriers in the long run.  

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