Economic damage could be worse without lockdown and social distancing - study

The worst thing for the economy would be not acting at all to prevent disease spread, followed by too short a lockdown, according to research based on US data. Taking no action is unacceptable from public health perspective, and extremely risky from an economic perspective Giancarlo Corsetti There is much debate over the economic costs of our lockdown lives: whether the price of disease mitigation is worth the risk of an enduring financial crisis. New research from the University of Cambridge suggests that there is no absolute trade-off between the economy and human health - and that the economic price of inaction could be twice as high as that of a "structured lockdown". A Cambridge economist, together with researchers at the US Federal Reserve Board, has combined macroeconomics with aspects of epidemiology to develop a model for the economic consequences of social distancing. The study uses US economic and population data, but the researchers say their findings have implications for most developed economies. It divides the working population into "core workers" - those in healthcare as well as food and transportation, sanitation and energy supply, among others - and then everyone else, and models the spread of the virus if no action is taken. "Without public health restrictions, the random spread of the disease will inevitably hit sectors and industries that are essential for the economy to run," said co-author Prof Giancarlo Corsetti, from Cambridge's Faculty of Economics.