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The Economics of Lockdowns

Featuring Emil Verner, John H. Cochrane, Anna Scherbina, & Ryan Bourne

The COVID-19 pandemic has had dire effects on both public health and the economy. In reaction to the virus’s spread, many states have implemented stay‐​at‐​home orders and closures of all “nonessential businesses.” And national lockdowns have been mandated all over Europe.

These lockdowns raise all sorts of important economic questions:

  • How much of the coming downturn will be driven by government shutdowns as opposed to the changing consumer and producer behavior we’d expect because of the virus?
  • What will be the net consequences of lockdowns for economic welfare?
  • What factors determine the optimal length and scope of these more suppressive measures?
  • Are there alternatives to lockdowns that could achieve equivalent or higher benefits at lower total cost?