05 May 2020

The great lockdown

Was it worth it?

Daniel Gros

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What the IMF calls the ‘great lockdown’ has thrown Europe and the global economy into deep recession. When putting their countries into lockdown, governments essentially pushed the panic button, mostly in the face of rising fatalities. Was this the right choice? The answer is usually framed in terms of lives saved versus jobs lost.

In this Policy Insight, Daniel Gros takes a closer look at the actual medical care expenses engendered by the pandemic so far and a bottom-up calculation of hospitalisation costs and finds that the economic costs of the great lockdown, while huge, might still be lower than the medical costs that an unchecked spread of the virus would have generated. There might thus be no need to assign an economic value to the lives saved to reach the conclusion that an unchecked spread of Covid-19 would have led to even higher costs than the great lockdown.

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