Economic mobility likely to increase significantly after relaxation - but also number of COVID-19 cases

Oliver Holtemöller and Malte Rieth

No 3/2021 (en), IWH Policy Notes from Halle Institute for Economic Research (IWH)

Abstract: In Germany, measures to contain the coronavirus were relaxed in some areas at the beginning of March; in many places, for example, the restrictions on private and public gatherings were eased, and retail stores are increasingly able to receive customers again. The aim of these decisions is to allow for more economic mobility and personal contact between people. However, the frequency of contact is a major factor influencing the rate at which the coronavirus spreads, especially since the relaxations have so far not been accompanied by a systematic testing strategy; and vaccination progress has so far also fallen short of expectations. Estimates based on a model of the relationship between containment measures (Oxford COVID-19 Government Response Tracker, Stringency Index), economic mobility (Google Mobility Data), new corona infections, and deaths with data from 44 countries suggest that the recent relaxations increase economic mobility by ten percentage points and the number of new infections and deaths in Germany by 25%. Because both continued lockdown and relaxations have significant negative consequences, it is even more important to enable further relaxations through better testing and quarantine strategies and by increasing the pace of vaccination without putting people's health at risk.

Keywords: containment policy; coronavirus; lockdown; mobility (search for similar items in EconPapers)
JEL-codes: E32 H8 I1 (search for similar items in EconPapers)
Date: 2021
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