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The Causal Effects of Lockdown Policies on Health and Macroeconomic Outcomes

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  • Jonas E. Arias
  • Jesús Fernández-Villaverde
  • Juan Rubio Ramírez
  • Minchul Shin

Abstract

We assess the causal impact of epidemic-induced lockdowns on health and macroeconomic outcomes and measure the trade-off between containing the spread of an epidemic and economic activity. To do so, we estimate an epidemiological model with time-varying parameters and use its output as information for estimating SVARs and LPs that quantify the causal effects of nonpharmaceutical policy interventions. We apply our approach to Belgian data for the COVID-19 epidemic during 2020. We find that additional government-mandated mobility curtailments would have reduced deaths at a very small cost in terms of GDP.

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  • Jonas E. Arias & Jesús Fernández-Villaverde & Juan Rubio Ramírez & Minchul Shin, 2021. "The Causal Effects of Lockdown Policies on Health and Macroeconomic Outcomes," NBER Working Papers 28617, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28617
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    More about this item

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • I1 - Health, Education, and Welfare - - Health

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