Chris Johns: Lesson for second Covid wave is clear – do not shut the economy

Economic lockdown just creates unemployment but does not stop the deaths

Shut the economy down for long enough and the resources necessary for a functioning broad-based health service begin to be impaired

Shut the economy down for long enough and the resources necessary for a functioning broad-based health service begin to be impaired

 

One of the criticisms of the UK – and other – government’s response to Covid-19 has been the apparent lack of breadth of the science that is repeatedly invoked to support whatever the authorities are doing. Economists have not unreasonably suggested they should be more involved in policy formulation given their deep domain knowledge of mathematical modelling.

Initial controversy focused mainly on the health costs of the economic consequences of the lockdown. Covid-19 has known health costs, the lockdown has known economic costs. Most economists argued that the two are not in conflict: the priority was health. That meant the lockdown was supported by most mainstream economists. The tough calculus starts when we bring time into our equations.

The longer lockdowns persist, the greater the economic costs. These, in turn, lead to health consequences. We have already observed some of these. Lack of cancer screening and other non-treatments of non-Covid ailments soon add up to illness and potential fatalities.

Shut the economy down for long enough and the resources necessary for a functioning, broad-based health service begin to be impaired. To repeat, people will get sick for non-Covid reasons in a way that would not have happened if we hadn’t locked the economy down.

This kind of thinking informed the narrow, non-political debate over lockdown. It explains, partially, why governments, to varying degrees, have been willing to take risks with easing lockdown, risks that have either made scientists nervous or actually flown in the face of the advice they are giving.

Borders

In a way, the job of the epidemiologist is easy: they know that if the economy is locked down for long enough the disease will be suppressed, perhaps eradicated. They also know that the disease, once eradicated, will not reemerge if borders are sealed. In a sense, that’s the scientist’s job done. For the politician, of course, it ain’t that easy.

The pity is the way in which that narrow, non-political discussion has been hijacked, in some countries at least, by ideologues and culture warriors. Ireland should congratulate itself in not allowing too much of this to take centre stage.

Economists are now teaming up with epidemiologists to try to make constructive contributions. To try and answer the question, “what is right approach now?”

One such effort was published last week by the US’s Brookings Institution. Professors Baqaee, Fahri, Mina and Stock of the University of California and Harvard have made an important contribution to the debate. First, they display the power of epidemiologists and economists working together, and, second, they explicitly address perhaps the most important question of the moment, what policies should we prepare in anticipation of a second wave?

The research involves a new combined epidemiological and economic model of the US economy, but, I would assert, carries important lessons for all countries. At the very least we have a template for thinking about our own economy.

Not surprisingly it’s detailed stuff. The academics split the US economy into 66 sectors, weighted by economic output, health risks and the age distribution of workers within each sector. They model safety measures such as prohibitions on large non-work gatherings, mask-wearing and special measures for the elderly. Workplace practices are assumed to include such things as staggered shifts, social distancing, Plexiglas shields, masks and other measures. Schools are assumed to reopen in the autumn but with distancing and staggered classes.

The modelling can be adapted to look at many different kinds of scenarios. In one stark conclusion they assume non-workplace restrictions fall back to 50 per cent of pre-pandemic levels and all businesses reopen. In this case the model predicts a rise in US Covid-19 deaths from around 130,000 currently to 450,000 by the new year. That, one presumes, would be considered a compete failure, if not a disaster. We can only hope it is just a scenario, not a prediction.

Death toll

In another scenario businesses are again locked down but non-work restrictions are not reimposed. In this case the death toll falls to 375,000 and unemployment rises to 15 per cent.

In another simulation businesses remain open subject to official healthcare guidelines, and strict non-work measures are imposed focusing on test, trace and isolation, as well as protections for the elderly. The death toll predicted by the model falls to 160,000 by year-end, and unemployment actually subsides to 6 per cent.

The conclusions are clear. For that alone we should be grateful. “Our modelling suggests that shutting down the economy is neither necessary nor desirable. It just creates unemployment but doesn’t stop the deaths….the focus of policy responses to a second wave should be on doubling down on the mitigation measures outside work.”

Those non-work measures are recommended to be restrictions on all large group gatherings, including “parties, bingo and church services”.

I’ve written previously about parties, about the evidence suggesting prevalence of super-spreading events that occur indoors where people sing, shout or otherwise get in each other’s faces. For instance, apres-ski bars in an Austrian resort are reported to have contributed to around 40 per cent of Norway’s cases.

This new research is important. It emphasises in case anyone hasn’t been paying attention the paramount importance of a test-and-trace regime. Another generalised lockdown won’t be necessary if we get all our policy ducks in a row.

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