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.
READER COMMENTS
Alan Goldhammer
Aug 9 2020 at 4:12pm
Spain had live opera at the Madrid opera house in late July. Paris have also had some concerts as well. Most all arts in the US are shut down for the remainder of this year.
blink
Aug 9 2020 at 7:58pm
I think you are right about the aggregate data, though I think it is important to be more specific about policies. The middling economic results are due to some productive and some counter-productive policies and we ought to try to tease them apart (as we ought everywhere). The “staying open” bit I think will look very good for some sectors, for example. On the other side, much of Sweeden’s poor performance in terms of health/deaths is due to terrible nursing home policy which we ought not use to decide whether the relaxed lock-down approach was a good plan or not.
Variant
Aug 9 2020 at 9:06pm
The performance of any nation’s economy is as much a function of the global market as it is global. By that measure, it will be difficult for any economy, including Sweden’s to not see a drop off due to the actions of those it trades with.
However, there will be a key ingredient that will enable Sweden to recover more quickly than other economies — less fear within its population. By focusing on the scientific approach rather than the headline-driven political jostling seen elsewhere, Sweden’s population already has confidence to be out and about while citizens in other countries hunker down behind fears with very little basis in reality.
Magnus Back
Aug 10 2020 at 4:44pm
The Nordic countries don’t rely on the same industries so the impact will be different.
Denmark relies on pharmaceuticals and food, both should be extremely resilient to covid impact. Norway of Oil (bad) etc.
Now the rising covid infection rates in Norway and Denmark might affect how people act. They risk going into a start/stop period where people will be confused and maybe risk averse. This will impact the economy.
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