Protecting Lives and Livelihoods with Early and Tight Lockdowns

Francesca Caselli, Francesco Grigoli (), Weicheng Lian and Damiano Sandri

No 2020/234, IMF Working Papers from International Monetary Fund

Abstract: 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.

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 (search for similar items in EconPapers)
Pages: 27
Date: 2020-11-08
New Economics Papers: this item is included in nep-hea
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Citations: View citations in EconPapers (14)

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Journal Article: Protecting Lives and Livelihoods with Early and Tight Lockdowns (2022)
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