Economic consequences of lockdowns – including their regressive impacts

Lockdowns are nothing short of suicidal. Upper class elites are very relaxed about them (at least for now), but the poor are beginning to suffer very badly.

There is a lot of literature floating around. I’m unable to spend time to bring all this together, but a few links below when I find time.

My earlier blog post: Further notes on CBA for pandemic options

My TOI article on economic impacts: An outline cost-benefit test of COVID-19 lockdowns

Experts are blind: “Medical scientists’ … opinions ought not to be given undue weight. They are only focusing on what can be seen – the COVID-19 deaths and not the unseen deaths, misery and loss of liberty.” [Source]

The lockdown is killing people, too – 16 April 2020

SARS-CoV-2 Response: Where Do We Go from Here? (Introduction) – 16 April 2020

Coronavirus: We can win this war — and avoid an economic defeat – Henry Ergas, 17 April 2020

Although estimates vary, merely extending the restrictions by another two months could permanently reduce gross domestic product by $95bn, almost equal to a year’s public spending on education. The decline in what economists call “welfare”, which adds to the GDP cost the losses consumers and producer incur when they are prevented from engaging in mutually beneficial trades, would be even larger, taking the total to about $130bn.

The supply chain starts to fail, part two – 13 April 2020

Another U.S.-Wide Housing Slump Is Coming – 12 April 2020

JPMorgan economists have recently amended their forecast to a 40 per cent decline in GDP in the quarter and a 20 per cent unemployment rate. [Source]

Coronavirus Australia: worst year since Great Depression, says IMF – 15 April 2020

New OECD outlook on the global economy – 26 March 2020

For each month of containment, there will be a loss of 2 percentage points in annual GDP growth.

SPECIFIC SECTORS THAT ARE GOING TO BE IMPACTED

Jim Cramer advises investors to sell these groups of stocks ‘whenever they bounce’ – 16 April 2020

Sectors that will suffer badly without herd immunity

• travel (including air, train/public transport)
• tourism and hospitality (including airbnb, hotels, cruise ships)
• entertainment (TV live shows, opera, theatre, theme parks, movies, big events, small events – political and religious gatherings/ events are included here)
• sports and gyms (all – cricket, football, tennis, competitive and recreational sports etc. except maybe chess and such “distant” sports)
• restaurants (many will minimise visits), street food.
• house repairs (people will minimise outsiders visiting their homes)
• hair dressing (many will avoid)
• clothing and shoes (less “big social events” means less need for fancy clothes)
• retail malls (fewer trips made)
• executive education (many aged students will minimise such courses)
• food processing (particularly industries with intense human involvement)

Many other sectors will suffer second-order affects – through reduced demand (e.g. furniture, house furnishings, toys, pet stores, IT hardware, etc.).

HIDDEN COSTS/ UNINTENDED CONSEQUENCES

A zoo is struggling so much that it may have to feed some animals to other animals – 15 April 2020

When Home Is More Dangerous Than the Coronavirus – 27 March 2020

Coronavirus outbreak raises threats to mental health – 27 March 2020

People in countries without herd immunity will remain in a perpetual state of fear, flattening their economies:

reversion to the use of firewood

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