15th April 2020
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]
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
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.).
A summary of how lockdown economies will behave. These barbarians nations will remain scared for years.
— Sanjeev Sabhlok, Pope @Church of Reason & Liberty. (@sabhlok) April 19, 2020
HIDDEN COSTS/ UNINTENDED CONSEQUENCES
While working at home might improve output in the traditional sense, it is likely to reduce innovation which requires a face-to-face, vigorous, exchange of ideas which office environments are best suited to provide.
Agglomeration effects are all about proximity.
— Sanjeev Sabhlok, Pope @Church of Reason & Liberty. (@sabhlok) April 20, 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:
The ONLY way for people to become comfortable to venture out is for herd immunity to be achieved.
The longer the West delays herd immunity, the greater will be the hit to their economies. Tens of trillions of dollars will be wiped out – not by the virus but by stupidity. pic.twitter.com/ZQh9aHTRmF
— Sanjeev Sabhlok (@sabhlok) April 18, 2020
reversion to the use of firewood
Yet another way the lockdown will kill poor Indians (not just through starvation and malnutrition)
Jobless, they won't be able to buy LPG cylinders and so revert to firewood, damaging their lungs.
A million already die from firewood use. More will now die.
— Sanjeev Sabhlok (@sabhlok) April 17, 2020