Hiroyasu Inoue, Yasuyuki Todo, 16 April 2020

Cities and regions around the world are in lockdown in an attempt to contain the spread of Covid-19. This column examines how the economic effect of the lockdown of a city can propagate to other regions in the country, focusing on the case of Tokyo. The findings suggest that if Tokyo were to be locked down for two weeks, the loss in value added production in the city would be 4.3 trillion yen, while the production loss in the rest of Japan due to propagation through supply chains would be 5 trillion yen. In addition, the effect on other regions becomes progressively larger as the duration of the lockdown grows.

Debraj Ray, 16 April 2020

Governments have a tendency to prefer minimising visible dangers. A tight lockdown reduces visible deaths from Covid-19, but brings with it diffuse, and relatively invisible deaths (for example suicide, domestic violence). Debraj Ray (NYU) is coauthor of CEPR's Policy Insight 102: India's Lockdown 

Lore Vandewalle, 16 April 2020

In India, the trade-off the government is facing is not lives vs the economy when it comes to fighting Covid-19, but lives vs lives. The aim is not to lose more people to the containment measures than the virus would claim without them. Lore Vandewalle (IHEID) is a coauthor of CEPR Policy Insight 102, India's Lockdown

Debraj Ray, Lore Vandewalle, 15 March 2020

On 24 March 2020, the government of India ordered a nationwide lockdown of 1.3 billion people for 21 days as a preventive measure against COVID-19. Given what we know of the epidemic, it is difficult to quarrel with the prescription of social distancing and lockdown, when accompanied by state measures that provide adequate economic protection, but what happens in countries where the state is unable to provide the necessary back-up welfare measures? Debraj Ray (NYU) and Lore Vandewalle (IHEID) discuss the ideas presented in the CEPR Policy Insight they recently authored (together with Sreenivasan Subramanian). Download the paper here

Romina Gambacorta, Alfonso Rosolia, Francesca Zanichelli, 15 April 2020

Household incomes are bound to be severely hit by the lockdowns imposed across the world in response to the COVID-19 pandemic. This column uses survey data on European households’ balance sheets to demonstrate that across European countries there are large (and similar) shares of the population that are likely to suffer from the economic fallout of containment measures – albeit through different channels – and that, were the lockdowns to last three months, might not have sufficient financial resources to maintain a minimum threshold of wellbeing.

Tobias Hartl, Klaus Wälde, Enzo Weber, 14 April 2020

Containment measures have been in place in Germany since the middle of March in response to the COVID-19 pandemic. This column examines the impact of these measures on the spread of the virus. It finds a reduction in the growth rate of COVID-19 seven days after the implementation of the policies on 13 March and again eight days after the implementation of further measures on 22 March. 

Romesh Vaitilingam, 10 April 2020

The lockdowns in place around the world to limit the contagion of Covid-19 have been implemented without reliable information on the spread of the disease or the prevalence of the novel coronavirus in the population. The IGM Forum at Chicago Booth invited its panel of leading US economists to express their views on the role of testing for infections and antibodies to inform decisions about easing measures on social distancing and allowing the return of public activities. This column reveals a strong consensus among the experts on the value of random testing to establish baseline levels of the virus, and near unanimity on the need for a massive increase in testing capacity as part of a clear strategy for an economic restart.

Tito Boeri, Alessandro Caiumi, Marco Paccagnella, 09 April 2020

In getting people back to work before a vaccine is developed, policymakers will have to balance medical risks and economic risks. This column presents some calculations on the number of jobs that can be carried out without putting workers at risk of being infected by COVID-19. The findings suggest that the share of jobs that can be performed without putting workers’ health at risk is limited, and probably does not reach 50%. Importantly, this share is even lower in strategic industries that supply the health sector.

Gloria Moroni, Cheti Nicoletti, Emma Tominey, 09 April 2020

The COVID-19 crisis has closed down schools around the world, leaving parents and guardians to educate their children at home. In this way as in others, the crisis will not affect all families equally, but will cause particular harm to children from low-income and less-educated households. This column suggests that socio-emotional issues in children will be amplified if their home environment is stressful, and suggests some ways that governments can mitigate that stress and support struggling families.

Federico Sturzenegger, 09 April 2020

Argentina has been in lockdown since early March. This column points to two questions: Why should workers pay rent when they are banned from selling their labour? Why should the incomes of people with secure jobs be smoothed as much as those who have lost their jobs? In this moment of dire fiscal need, it seems inefficient to transfer money to the relatively well off – especially at a time when they can´t spend it.

Debraj Ray, Sreenivasan Subramanian, Lore Vandewalle, 08 April 2020

On 24 March, the government of India ordered a nationwide lockdown of 1.3 billion people for 21 days as a preventive measure against COVID-19. Given what we know of the epidemic, it is difficult to quarrel with the prescription of social distancing and lockdown, when accompanied by state measures that provide adequate economic protection. This column asks what happens when the state is unable to provide the necessary back-up welfare measures.

James Stock, 04 April 2020

Decisions about whether to clamp down or ease up on social distancing hinge on how deadly and widespread is the novel coronavirus. But as this column discusses, neither is known because tests for the virus have focused on those showing severe symptoms and at high risk. If the virus is still not widespread, then it is deadly and there is still time to implement measures – more severe than those currently in place in the US – to suppress it until a vaccine or treatment becomes available. If the virus is widespread, then the true death rate is low and cautiously opening up the economy becomes an option. Data from random testing of the population, which are still unavailable, are critical to informing this choice.

Emanuel Ornelas, 28 March 2020

Countries worldwide are implementing lockdown measures to contain the COVID-19 pandemic. Very soon, the question will be how to lift the lockdowns while keeping the epidemic in check. This column uses basic economic principles to shed light on the key trade-offs. A central message is that there is no ‘health versus economics’ dichotomy. Rather, some degree of lockdown is typically optimal in a crisis like this, balancing economic costs against health benefits. Moreover, the optimal level of lockdown is dynamic, changing over time and eventually becoming more lenient.

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