Lockdowns are partly endogenous
By Scott Sumner
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.