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In response to the novel and deadly coronavirus, many governments deployed draconian tactics never used in modern times: severe and broad restrictions on daily activity that helped send the world into its deepest peacetime slump since the Great Depression.
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The equivalent of 400 million jobs have been lost world-wide, 13 million in the U.S. alone. Global output is on track to fall 5% this year, far worse than during the financial crisis, according to the International Monetary Fund.
Despite this steep price, few policy makers felt they had a choice, seeing the economic crisis as a side effect of the health crisis. They ordered nonessential businesses closed and told people to stay home, all without the extensive analysis of benefits and risks that usually precedes a new medical treatment.
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There wasn’t time to gather that sort of evidence: Faced with a poorly understood and rapidly spreading pathogen, they prioritized saving lives.
Five months later, the evidence suggests lockdowns were an overly blunt and economically costly tool. They are politically difficult to keep in place for long enough to stamp out the virus. The evidence also points to alternative strategies that could slow the spread of the epidemic at much less cost. As cases flare up throughout the U.S., some experts are urging policy makers to pursue these more targeted restrictions and interventions rather than another crippling round of lockdowns.
“We’re on the cusp of an economic catastrophe,” said James Stock, a Harvard University economist who, with Harvard epidemiologist Michael Mina and others, is modeling how to avoid a surge in deaths without a deeply damaging lockdown. “We can avoid the worst of that catastrophe by being disciplined,” Mr. Stock said.
The economic pain from pandemics mostly comes not from sick people but from healthy people trying not to get sick: consumers and workers who stay home, and businesses that rearrange or suspend production. A lot of this is voluntary, so some economic hit is inevitable whether or not governments impose restrictions.
Disentangling voluntary and government-ordered effects is hard. One study, by economists Austan Goolsbee and Chad Syverson at the University of Chicago, says government restrictions account for just 12% of the decline in consumer mobility in the U.S.; another, by a team led by economists Kosali Simon at Indiana University and Bruce Weinberg at Ohio State, says they account for 60% of the loss of employment.
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Still, because of the close connection between the pandemic and economic activity, many epidemiologists and economists say the economy can’t recover while the virus is out of control. “The virus is going to determine when we can safely reopen,” Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said in April. The Federal Reserve said in late July that “the path of the economy will depend significantly on the course of the virus.”
Such statements leave wide open what represents an acceptable level of infection, which in turn determines what restrictions to impose. If the only acceptable level of infection were zero, lockdowns would have to be severe and potentially repeated, or at least until an effective vaccine or treatment comes along. Most countries have rejected that course.
Prior to Covid-19, lockdowns weren’t part of the standard epidemic tool kit, which was primarily designed with flu in mind.
During the 1918-1919 flu pandemic, some American cities closed schools, churches and theaters, banned large gatherings and funerals and restricted store hours. But none imposed stay-at-home orders or closed all nonessential businesses. No such measures were imposed during the 1957 flu pandemic, the next-deadliest one; even schools stayed open.
Lockdowns weren’t part of the contemporary playbook, either. Canada’s pandemic guidelines concluded that restrictions on movement were “impractical, if not impossible.” The U.S. Centers for Disease Control and Prevention, in its 2017 community mitigation guidelines for pandemic flu, didn’t recommend stay-at-home orders or closing nonessential businesses even for a flu as severe as the one a century ago.
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So when China locked down Wuhan and surrounding Hubei province in January, and Italy imposed blanket stay-at-home orders in March, many epidemiologists elsewhere thought the steps were unnecessarily harmful and potentially ineffective.
By late March, they had changed their minds. The sight of hospitals in Italy overwhelmed with dying patients shocked people in other countries. Covid-19 was much deadlier than flu, it was able to spread asymptomatically, and it had no vaccine or effective therapy.
Taiwan, South Korea and Hong Kong set early examples of how to stop Covid-19 without lockdowns. Their reflexes trained by SARS in 2003, MERS and avian flu, they quickly cut travel to China, introduced widespread testing to isolate the infected and traced contacts. Their populations quickly donned face masks.
Sweden took a different approach. Instead of lockdowns, it imposed only modest restrictions to keep cases at levels its hospitals could handle.
Sweden has suffered more deaths per capita than neighboring Denmark but fewer than Britain, and it has paid less of an economic price than either, according to JPMorgan Chase & Co.
Sweden’s current infection and death rates are as low as the rest of Europe’s. That has prompted speculation that it is pursuing herd immunity—the point when enough of the population is immune, due to prior exposure or vaccination, so that person-to-person transmission declines and the epidemic dies out. There is no consensus on where that point is, in Sweden or elsewhere.
By March, it was too late for the U.S. to emulate the test-and-trace strategy of east Asia. The CDC had botched the initial development and distribution of tests, and limited testing capacity meant countless infections went undetected for months. President Trump continued to downplay testing, and even today the U.S. conducts fewer than 20 tests for every confirmed case, compared with more than 500 in Taiwan and South Korea at their peaks.