The Bigger the Better
- fionacsweet
- Jun 4, 2020
- 2 min read
A team of researchers led by economist Dabo Guan from Tsinghua University in China found that stricter lockdowns are actually better for economies. This makes sense, as businesses can get through a shorter, more extreme lockdown but may run out of supplies if trying to get through a much longer, drawn out one that maybe is not as serious. More importantly, if the pandemic returns because the first lockdown was not serious enough, a second round of lockdowns will hit economies really hard. Shorter, stricter lockdowns minimize the impact on supply chains and disrupt the economy less than a drawn out lockdown that gets reimplemented after a short break.
The team simulated 3 different lockdowns: one with 80% of travel and labor ceased (similar to China), one with 60% of travel and labor ceased (like the US), and one with 40% of travel and labor ceased. They found that a gradual easing over a year would minimize damage to the global supply chain, but that if the virus came back in the fall it would drop costs to the economy by a third. The researchers also found that the economy will be even worse off if countries stagger a second round of closures instead of coordinating them. A coordinated global lockdown would raise costs by 33%, while a staggered global lockdown would raise them by 57%.
Steve Davis of the University of California Irvine (who took part in the study) said "Our analysis quantifies the global economic benefits of robust public health responses and suggests that economic justifications to re-open businesses could backfire if they result in another round of lockdowns."
After hearing this argument, I think that there is good evidence here to believe that it may not be beneficial to the United States to put such a large focus on reopening at this moment in time. In the first place, we should have put larger restrictions down, but that is the benefit of hindsight. All I think we can do now is prepare for a second wave in the fall that we have to catch and mitigate in a coordinated, short and succinct way.
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