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Designing Reopening Strategies in the Aftermath of COVID-19 Lockdowns: Some Principles with an Application to Denmark

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  • Andersen, Torben M.

    (Aarhus University)

  • Schröder, Philipp J. H.

    (Aarhus University)

  • Svarer, Michael

    (Aarhus University)

Abstract

Governments across the globe have responded to the threat of the Covid-19 virus by imposing substantial lockdown measures largely guided by epidemiological concerns. These lockdowns come at significant economic costs with increased risk of e.g. mass unemployment. Recently, debates have emerged on how to design reopening strategies that achieve the largest possible economic gains while constraining the spread of the virus. The present paper identifies five central challenges economists face in delineating the trade-off between containing the virus from spreading and the economic consequences and costs of lockdown measures. While the principle of tradeoffs is at the core of economics, the road to actually operationalizing this perspective on Covid-19-related lockdown measures is still unpaved. We present several workarounds to the identified challenges based on a recently prepared economic expert assessment commissioned by the Danish government. A reduced form indicator for virus spread pressure is developed and mapped against economic indicators. The resulting tool captures the trade-off between health and economic concerns and can guide the design of reopening strategies.

Suggested Citation

  • Andersen, Torben M. & Schröder, Philipp J. H. & Svarer, Michael, 2020. "Designing Reopening Strategies in the Aftermath of COVID-19 Lockdowns: Some Principles with an Application to Denmark," IZA Policy Papers 158, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izapps:pp158
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    References listed on IDEAS

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    5. Zhixian Lin & Christopher M. Meissner, 2020. "Health vs. Wealth? Public Health Policies and the Economy During Covid-19," NBER Working Papers 27099, National Bureau of Economic Research, Inc.
    6. Rikard Forslid & Mathias Herzing, 2021. "Assessing the consequences of quarantines during a pandemic," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(7), pages 1115-1128, September.
    7. Anand, Paul, 2020. "Economic Policies for COVID-19," IZA Policy Papers 156, Institute of Labor Economics (IZA).
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    Cited by:

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    2. Juan Laborda & Pilar Rivera-Torres & Vicente Salas-Fumas & Cristina Suárez, 2021. "Is there life beyond the Spanish government’s aid to furloughed employees by COVID-19?," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-21, June.
    3. Soltanisehat, Leili & González, Andrés D. & Barker, Kash, 2023. "Modeling social, economic, and health perspectives for optimal pandemic policy decision-making," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).

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    More about this item

    Keywords

    COVID-19; reopening strategies; fiscal response;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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