In monetary policy, a common mistake is to assume that low interest rates and/or QE are indications of an easy money policy. They might be, but more often they are the effect of a tight money policy that drove interest rates to zero or below, and dramatically increased the demand for liquidity (i.e. base money.)
I wonder if something similar is true of lockdowns during the Covid-19 pandemic. Certainly there are occasions when lockdowns are reflective of an aggressive policy of containment, but perhaps just as often they reflect the exact opposite.
Germany was much more successful in containing the virus than the other major Western European powers, and as a result had less restrictive lockdowns:
This occurred despite one of Europe’s least draconian shutdowns. Though schools, non-essential shops and restaurants were closed for weeks, a large proportion of businesses and factories continued to operate as normal. Germany also left lockdown more quickly than many of its neighbours.
Some East Asian countries were even more successful than Germany, and in many cases they even allowed their restaurants to stay open.
In contrast, where the epidemic got out of control, as in Italy and Spain, extremely restrictive lockdowns were often put in place.
I often see the discussion framed as “lockdowns vs. lots of deaths”. That’s true in a few cases, but just as often lockdowns are endogenous, a sign countries have stumbled into the “lots of deaths” equilibrium.
This is why I continue to reject the framing of the debate over Sweden’s policies, a country that avoided mandatory lockdowns. In most cases, the best way to avoid lockdowns is by restraining the virus with a combination of test/trace/isolate, masks, hand washing, and voluntary social distancing, not herd immunity. Do all that and you will likely be able to avoid mandatory lockdowns.
Neither Sweden nor Norway is the model; it’s the most successful East Asian democracies that deserve our attention.
PS. I understand that Germany had more time to prepare than Italy. But so did the UK. Britain wasted valuable time flirting with a “herd immunity” approach before opting for a more conventional approach. It ended up with the worst of both worlds—lockdowns plus even more deaths than Italy.
READER COMMENTS
Tsergo Ri
Jun 4 2020 at 11:43pm
I think lockdown is exogeneous in India (and soon in Bangladesh and Nepal).
India first tried to defeat the virus. But it is now relaxing as the cases are rising.
Maybe it will go into lockdown again if the death toll becomes very large. It’d be interesting to see how much deaths/day they can stomach.
John Alcorn
Jun 5 2020 at 9:08am
Re:
1) Isn’t also ‘the combination of test/trace/isolate, masks, hand-washing, and voluntary social distancing’ endogenous?
East-Asian nations were primed to readiness for test/trace/isolate because of recent proximate scares from SARS.
Johan Giesecke makes a case that masks would not translate well quickly to Sweden, where they are not endogenous. He argues that masks would undermine Sweden’s endogenous norm of self-isolation by symptomatic individuals (a key element in Sweden’s approach). The psychological mechanism would be: ‘Although I have fever or cough, I don’t have to self-isolate if I wear a mask, which will protect others from my droplets.’ It is an empirical question, in Sweden’s context, whether new contagion by erosion of the norm of self-isolation by symptomatic individuals (with masks) would exceed asymptomatic contagion when people don’t wear masks but do engage in voluntary social distancing.
2) Laws and norms about central quarantine of contacts of infected individuals are endogenous. There seems to be path dependence in screen/test/trace/isolate policy regimes.
3) Sweden has avoided both exogenous and endogenous mandatory lockdown, and has remained within hospital capacity, despite lack of readiness for efficient testing, especially in eldercare facilities and hospices. Heterogeneity within a populace is a crucial parameter. It is crucial to segment and shield persons who are elderly, frail, or have relevant co-morbidities. Sweden’s authorities acknowledge failure swiftly to manage heterogeneity adequately, and are targeting reforms and resources accordingly.
4) Heterogeneity among nations, in prevalence of infection, and in prevalence of acquired immunity, also might become crucial in the pandemic. If the pandemic persists in many countries, then even East Asian democracies, which have suppressed contagion, might suffer major economic costs to keep out the coronavirus (from business travel or tourism). Compare Robin Hanson’s blogposts (at Overcoming Bias) about heterogeneity and international interaction in the pandemic.
This might be a long game.
Brian
Jun 5 2020 at 4:25pm
“It is an empirical question, in Sweden’s context, whether new contagion by erosion of the norm of self-isolation by symptomatic individuals (with masks) would exceed asymptomatic contagion when people don’t wear masks but do engage in voluntary social distancing.”
John,
The evidence shows that near-universal mask-wearing (~80%) is more effective than lockdowns or social distancing.
https://arxiv.org/pdf/2004.13553.pdf
So “erosion of the norm” is basically irrelevant. The common argument that mask-wearing might be counterproductive is based on the idea that lockdowns and social distancing are the preferred approach for reducing transmission. Even the CDC talks about mask use mainly as a substitute when social distancing is not possible. Just the opposite is true. Have everyone use masks and all the other approaches become unnecessary.
John Alcorn
Jun 5 2020 at 5:21pm
Brian,
Thanks for sharing the link to the paper by De Kai et al. I’m no expert on masks, but have been reading widely about pandemic policy. I would like to draw attention to an overview of empirical research—including randomized control trials (RCTs)—about masks. See Julii Brainard (U. of East Anglia) et al., Facemasks and similar barriers to prevent respiratory illness such as COVID-19: A rapid systematic review (April 2020):
Scott Sumner
Jun 5 2020 at 4:58pm
All that is possible, but the best evidence we have is that Sweden is an outlier, and the herd immunity approach usually fails to hold up over time. I agree that from a certain perspective “everything is endogenous”, so it’s a judgment call as to where to fight policy battles. I’d rather advocate the Taiwan approach. You can say their culture is different from America, but Sweden’s culture is also very different from America.
Todd Kreider
Jun 5 2020 at 7:59pm
But Japan, an East Asian country, did almost no such trace and isolating for weeks and not clear how much from April. Japan has almost the same per capita Covid-19 deaths as the South Koreans who were supposedly the model testing country.
Nobody talks about this highly unusual outcome. They either ignore Japan or mistakenly lump it in with South Korea and Taiwan.
Thomas Hutcheson
Jun 6 2020 at 8:17am
Mask wearing properly seen as insurance against inadvertent transmission from asymptomatic infected persons should not undermine the norm of self isolation. That norm is undermines much more by lack of universal sick pay.
Alan Goldhammer
Jun 5 2020 at 9:26am
Quite right! However, it has to be implemented quickly which was not the case in many of the US hot spots. Look how long it took for the message about wearing masks to come out whereas this was one of the very first things that happened in South Korea and Taiwan. It may be that the US is just too big and diverse to be accepting of such voluntary approaches which is too sad.
Brian
Jun 5 2020 at 4:04pm
“Look how long it took for the message about wearing masks to come out whereas this was one of the very first things that happened in South Korea and Taiwan.”
Alan,
Even worse is that U.S. medical professionals discouraged the use of masks until well into April and even continued to doubt their effectiveness. I think mask wearing would have been easily and quickly implemented if the medical/governmental apparatus had required them in stores and businesses instead of closing everything. If you have to wear a mask to get groceries, you’re going to wear a mask.
Thomas Hutcheson
Jun 6 2020 at 9:27am
Right. The key mistake was not regulating (if necessary after clear messaging) behavior in public places — distancing, avoiding indoor crowds, working from home, mask wearing by the asymptomatic, ventilation, etc. — and instead of closing down certain venues and quasi-requiring remaining at home.
Such local (not state wide) messaging/regulations should have been constantly updated and modified as knowledge about transmission accumulated, local response to the messaging/regulations improved or deteriorated, local risk factors (informed by random testing) rose or fell, and hospital capacity varied. Varying abilities to test-trace and isolate would have fed back into local risk factors and hospital capacity to determine the messaging/regulations.
Knut P. Heen
Jun 5 2020 at 4:03pm
In Norway, the government released some rumors about a month ago that they closed down due to international pressure. The “experts” wanted to go the same route as Sweden. They never said anything about who exerted the pressure. I suspect it was NATO since Sweden (not a member) did something else. I think Sweden would have followed suit if the pressure came from the WHO or the EU. The NATO Secretary General’s sister is the director of Public Health in Norway.
Another point is that lockdowns are less costly to smaller countries when all their bigger trade partners already are in lockdown. In Sweden, I think Volvo is in voluntary lockdown for demand reasons. In Norway, we don’t know what to do with all the oil.
Thomas Hutcheson
Jun 6 2020 at 9:31am
How likely is “international pressure” vs. trying to blame “others” for one’s own mistakes?
Knut P. Heen
Jun 8 2020 at 12:11pm
I got the impression that “international pressure” slipped out of him at the press conference. Excuses and lies are often repeated. I heard this “excuse” only once.
Civil Resilience is a part of Article 3 of the NATO treaty. Ability to deal with mass causalities (including Covid-19) is part of the package. See here.
https://www.nato.int/cps/en/natohq/topics_132722.htm
All NATO members locked down. There are currently 29 NATO members. What is the probability that all of them make the same decision without efforts to coordinate in place?
Suppose each country decides yes to lockdown with a 50 percent probability each (because it is a controversial decision). With 29 independent draws we get 0 percent probability of 29 yes votes. There is only three ways to explain 29 lockdowns. Coordination, lockdown is a no-brainer decision (99 percent yes probability), or it happened by a freak accident. Coordination stands out as the most plausible explanation unless you are willing to accept that lockdown is a no-brainer.
Todd Kreider
Jun 5 2020 at 7:54pm
iJapan had less testing per capita than the U.S. and never had a lockdown while asking people to start staying at home weeks after coronavirus had been spreading in the country yet have had 900 deaths and are almost done for now. Why not adopt Japan’s (mostly non) policies?
Norway recently said that its lockdown was no more effective than had they just social distanced like Sweden.
U of Minnesota epidemiologist Michael Osterholm just had an hour long podcast three days ago explaining that cloth masks are neither effective for the wearer or those the wearer meets.
It is incorrect to assume as Scott does that all countries had more or less the same initial conditions when the epidemic hit when they are at times radically different. Part of the reason Britain has a higher death toll so far is that its flu season this winter was exceptionally mild. In other countries, those frail would have mostly died by early March.
Thomas Hutcheson
Jun 6 2020 at 9:44am
It’s hard to believe that wearing a mask to protect others is so ineffective as to justify the almost negligible cost to the wearer. When the cost of caution has such a low opportunity cost, why not use an “abundance of caution?”
Benoit Essiambre
Jun 5 2020 at 11:03pm
So you could say, both for monetary policy and infection control, that it’s not about the magnitude of the actions but about about being early and decisive.
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