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.

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.

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. 

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.

Christian Gollier, Stephane Straub, 03 April 2020

During the lockdowns in place in many countries, certain essential activities must be maintained. This column, the second in a three-part series, asks how we can determine a policy of exemptions to containment beyond these obvious activities, as well as how we might eventually exit containment. It argues that the cost of going to work – i.e. the risk of contracting the disease and becoming a vector of transmission – has to be compared to the societal benefit of the activity generated, and that the calculation often differs depending on whether one adopts an individual or a collective point of view. 

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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