In an article for The Conversation, Michael Smithson of the Australian National University argues that far from there being a toss-up between saving lives with a lockdown, and protecting the economy by keeping a country open, lockdown may in fact protect the economy.
Some arguments even leaned towards Indeed, US Treasury Secretary Steve Mnuchin said in June, “I think we’ve learned that if you shut down the economy, you’re going to create more damage.”
The choice of whether to implement lockdown has been a particularly difficult choice to make for South Africa, beset by deep inequality. Its lockdown caused its economy to shrink by 51% in the second quarter.
Economic and COVID data from 45 countries was sourced for analysis. The data has two outliers; namely China, which implemented a very effective early lockdown, and India, which implemented a strict lockdown that became very ineffective as time went by.
Consumer expenditure, an important indicator of economic activity, was negatively correlated with COVID cases, indicating that the economy fared better with attempts to suppress the virus (at least temporarily).
In European countries, GDP was positively correlated with COVID cases, indicating that economic activity itself drove up the rate of COVID cases.
The article’s conclusions do have some limitations. The economic data were drawn from the second quarter, and COVID cases were taken as of June 30, but the pandemic hit different countries at different times.
