By Scott Sumner
Tyler Cowen argues that there is too much moralizing over the Swedish policy on Covid-19. I agree. I’d add that there’s way too much focus on Sweden’s decision not to lockdown, and way too little focus on other aspects of Swedish policy.
But I don’t entirely agree with this:
In the meantime, the Swedish economy has been among the least badly hit in Europe.
That claim is defensible, but perhaps a bit misleading. Right now we simply don’t have enough data to know how Sweden is doing relative to the most comparable countries. The Q2 GDP data is likely to be heavily revised. So here’s my prediction: When all the GDP data is in for 2020 (say in February 2021), it will seem like Sweden’s economic performance is fairly typical. A bit better than the Eurozone and a bit worse than the other Nordic countries (Denmark, Norway and Finland.)
Here’s one small piece of evidence in support of my claim:
[Sweden’s] economy has suffered less than the European average in recent months, but at least as much and possibly more than its Nordic neighbours.
PS. I do believe that Sweden’s decision to avoid a lockdown slightly boosted its GDP, ceteris paribus, but not by a large amount. And also keep this in mind:
According to the University of Oxford’s government response tracker, countries from France, Austria and Croatia to Norway and Finland now all have fewer restrictions than Sweden.