The virus or the shutdown; Who killed the economy? - Printable Version
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The virus or the shutdown; Who killed the economy? - BostonCard - 07-01-2020
New paper in the NBER evaluates this by looking at border areas where one side was shutdown and the other wasn’t. The economic impact was mostly driven by the number of local deaths and not by lockdowns, which accounted for 7 percentage points out of the 60% decline in consumer traffic.
https://www.nber.org/papers/w27432
Quote: Comparing consumer behavior within the same commuting zones but across boundaries with different policy regimes suggests that legal shutdown orders account for only a modest share of the decline of economic activity (and that having county-level policy data is significantly more accurate than state-level data). While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry.
BC
RE: The virus or the shutdown; Who killed the economy? - chrisk - 07-01-2020
A lack of trust in the government and fellow citizens to do the right thing is driving many people to limit interactions.