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Protecting Lives and Livelihoods with Early and Tight Lockdowns
Author:
Mr. Francesco Casellinull

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,
Mr. Francesco Grigoli
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Weicheng Liannull

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Mr. Damiano Sandri
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Series:
IMF Working Papers
Volume/Issue:
Volume 2020: Issue 234
Language:
English
Publication Date:
08 Nov 2020
DOI:
https://doi.org/10.5089/9781513560434.001
ISBN:
9781513560434
ISSN:
1018-5941
Pages:
27
Keywords:
COVID-19; infections; lockdown; mobility; voluntary social distancing.; lockdown measure; lockdown stringency; lockdown tightening; lockdown restriction; sectors lockdown; job posting; effects of lockdown; Private savings; Economic recession; Unemployment rate; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Using high-frequency proxies for economic activity over a large sample of countries, we show that the economic crisis during the first seven months of the COVID-19 pandemic was only partly due to government lockdowns. Economic activity also contracted because of voluntary social distancing in response to higher infections. We also show that lockdowns can substantially reduce COVID-19 infections, especially if they are introduced early in a country's epidemic. Despite involving short-term economic costs, lockdowns may thus pave the way to a faster recovery by containing the spread of the virus and reducing voluntary social distancing. Finally, we document that lockdowns entail decreasing marginal economic costs but increasing marginal benefits in reducing infections. This suggests that tight short-lived lockdowns are preferable to mild prolonged measures.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2020: Issue 234