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The Cost of Staying Open: Voluntary Social Distancing and Lockdowns in the US

Yves here. As various analyses have shown, in many places, governments implemented lockdowns after citizens had started restricting their activities to avoid contracting Covid-19.

It’s useful to see economists address the question of what the cost of doing nothing or very little would have been.

By Adam Brzezinski, DPhil (PhD) candidate in Economics, University of Oxford, Valentin Kecht, Graduate Student, Bocconi University, and David Van Dijcke, DPhil student in Economics, University of Oxford. Originally published at VoxEU

Lockdown policies have been found to be effective in promoting social distancing and slowing down the spread of COVID-19. Yet, such measures are often blamed for downturns in the economy.

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This column argues that the lockdowns in the US are in fact efficient in minimising the costs of the epidemic, once both the economic and medical burden that would arise in the absence of such policies are considered.

Estimates from a controlled SIR model, which includes the possibility for changes in behaviour, suggest that lockdowns reduce the costs of the pandemic by at least 1.7% of annual GDP compared to a no-lockdown scenario.

With few exceptions, governments around the world have implemented lockdown policies in order to combat the COVID-19 pandemic. […]

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