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Re-opening economy ‘will have a much smaller-than-expected impact,’ experts argue

As states begin to reopen their economies amid the coronavirus pandemic , some experts are arguing that it won’t do much to alleviate the effects of the economic shock from the virus.

In a working paper for the National Bureau of Economic Research (NBER), Christopher M. Meissner and Peter Zhixian Lin, economists from the department of economics at UC Davis, found that lifting stay-at-home orders may not make much of a difference in terms of economic effects.

“If the disease is still out there and people perceive it to be dangerous to go out, they will not go out,” the co-authors told Yahoo Finance in an email. “Also, the rest of the world is in recession, too, and the ‘re-opening’ will have a much smaller than expected impact.”

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Every U.S. state is amid some form of reopening their economies. In states like Georgia and Texas, shelter-in-place orders have expired and the respective governors have reopened businesses as a means for stopping further havoc on the state’s economies.

The NBER paper had three main findings: the stay-at-home orders were likely effective in slowing the spread of the virus, but not in decreasing the rate of cumulative mortality; these orders may have impacted other jurisdictions; […]

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