What are the Economic Effects of Pandemic Containment Policies? Evidence from Sweden
IMF Working Papers, September 18, 2020
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Bibliographic details
- Authors: . Jana Bricco, Florian Misch, Alexandra Solovyeva
- Published: September 18, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513556109.001
Overview and research scope
- Authors: Jana Bricco, Florian Misch, Alexandra Solovyeva
- Date: September 18, 2020
- Series: IMF Working Papers, Working Paper No. 2020/191
- Issue: 191
- Volume: 2020
- Pages: 30
- DOI: https://doi.org/10.5089/9781513556109.001
- ISBN: 9781513556109
- ISSN: 1018-5941
- Subject tags: COVID-19, Health, Labor, Labor force, Population and demographics
- Keywords: containment, containment measure, containment strategy, IMF staff calculation, Sweden, WP
Sweden’s containment strategy and health outcomes
- Sweden’s approach during the ‘Great Lockdown’ was less stringent and based more on social responsibility than legal obligations compared to European peers.
- The paper provides an account of Sweden’s strategy and the health outcomes observed during the first Covid-19 wave.
Empirical findings on economic effects
- Analysis draws on a range of data sources and empirical findings focused on the first Covid-19 wave.
- Key finding: A less stringent strategy can soften the economic impact initially.
- Caveat: These initial benefits could be eroded subsequently due to potentially higher infection rates and a prolonged pandemic.
- In Sweden’s case, the evidence about subsequent erosion is mixed, and it is premature to judge the final outcome of Sweden’s containment strategy.
Determinants of economic effects
- The economic effects of a containment strategy depend on:
- social behavior;
- demographics;
- structural features of the economy, such as:
- the degree of export orientation;
- reliance on global supply chains;
- malleability to remote working.
Policy implications and interpretation
- A less stringent, socially responsible containment strategy may yield short-term economic softening relative to stricter measures.
- Policymakers should weigh short-term economic benefits against the risk of higher infection rates and a prolonged pandemic that could erode those benefits.
- Assessment of containment strategies should account for country-specific factors: social behavior, demographic structure, export orientation, supply-chain exposure, and capacity for remote work.
- Conclusions about the ultimate economic effectiveness of Sweden’s strategy are premature based on the evidence from the first wave.
IMF Working Paper: "What are the Economic Effects of Pandemic Containment Policies? Evidence from Sweden" (Working Paper No. 2020/191) by Jana Bricco, Florian Misch, Alexandra Solovyeva, September 18, 2020.
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