Protecting Lives and Livelihoods with Early and Tight Lockdowns

By Francesca Caselli, Francesco Grigoli, Weicheng Lian, Damiano Sandri

November 8, 2020

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Francesca Caselli, Francesco Grigoli, Weicheng Lian, and Damiano Sandri. Protecting Lives and Livelihoods with Early and Tight Lockdowns, (USA: International Monetary Fund, 2020) accessed April 18, 2025

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Using high-frequency proxies for economic activity over a large sample of countries, we show that the economic crisis during the first seven months of the COVID-19 pandemic was only partly due to government lockdowns. Economic activity also contracted because of voluntary social distancing in response to higher infections. We also show that lockdowns can substantially reduce COVID-19 infections, especially if they are introduced early in a country's epidemic. Despite involving short-term economic costs, lockdowns may thus pave the way to a faster recovery by containing the spread of the virus and reducing voluntary social distancing. Finally, we document that lockdowns entail decreasing marginal economic costs but increasing marginal benefits in reducing infections. This suggests that tight short-lived lockdowns are preferable to mild prolonged measures.

Subject: COVID-19, Economic growth, Economic recession, Health, Labor, National accounts, Private savings, Unemployment rate

Keywords: COVID-19, Economic recession, Effects of lockdown, Global, Infections, Job posting, Lockdown, Lockdown measure, Lockdown restriction, Lockdown stringency, Lockdown tightening, Mobility, Private savings, Sectors lockdown, Unemployment rate, Voluntary social distancing.

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/234
Stock No:

WPIEA2020234
ISBN:

9781513560434
ISSN:

1018-5941

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