Empty city center (in Peine, Lower Saxony): Is it the prohibition or the fear?
Photo: Hauke-Christian Dittrich / DPAThe situation seems clear. If the economy has collapsed so historically in recent months, it is because the government closed shops at the wedding of the corona pandemic and reduced interpersonal relationships to core family matters. The only question is apparently whether it was necessary - or negligently or maliciously superfluous, as is occasionally expressed on Berlin arterial roads.
And as it seems to be relevant again, at the latest since this week for the first time more than 1000 new corona cases were reported in one day. Since the numbers have been rising again, there is a kind of, shall we say, unease about old and possibly new restrictions not only from the relevant vegan environment. Economists have also been warning for days that a new lockdown would ruin the economy for good.
Unthinkable. So: just don't limit it again?
Thomas Fricke, arrow to the right
Born in 1965, has been running the WirtschaftsWunder internet portal since 2007. From 2002 to 2012 he was chief economist at the "Financial Times Deutschland". He is co-founder of the "Forum New Economy", in which experts have come together to create a new economic leitmotif.
Now there are certainly good reasons for worrying about the economic consequences of another high in the corona pandemic - if only because many companies have not really overcome the first one. But new evaluations of the spring crisis suggest that the severity of the economic damage does not depend on whether there are strong official contact restrictions or not. A finding that is not only very important for those who classify the face mask as a restart of the dictatorship in the country.
Whether or not the economic crisis would have been significantly less without lockdowns is difficult to determine at first glance. But there is no real measurable comparison. The fact that economic output began to fall in March at about the same time as the government's decisions did not mean that it was caused by the decisions - or that it would have happened anyway, given the panic that was emerging. Especially since many shops had hardly any visitors in the days before - which is more indicative of the anyway-so-thesis.
A possible answer is provided by two economists from the University of Chicago in a recently published study (Austan Goolsbee, Chad Syverson: "Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020", NBER Working Paper 27432, June 2020) . Using cell phone data, the two scientists compared when and how much in different regions in the USA from March to May visits to more than two million shops, restaurants, cinemas and numerous other service providers decreased. In order to then test whether and to what extent the declines were particularly strong where there were particularly strict regional lockdowns.
Very important: In order to rule out that any other locally specific circumstances are responsible for the economic consequences, Austan Goolsbee and Chad Syverson paid particular attention to the comparison of such inner-American border regions, between which people commute a lot, but which belong to different administrative districts - and in which therefore different strict rules applied.
Result: It almost didn’t matter whether strict contact conditions were in place in the neighboring areas on one side and loose contact conditions on the other - the movements decreased to a similar extent in both cases, i.e. also occasionally where there was no paternalism (in angry citizen's speech).
Fear of contagion, not of the law
Estimates by Obama advisor Goolsbee and his colleague suggest how relatively unimportant the requirements were: All in all, there was a decrease in frequency of 60 percent in the industries examined - only 7 percentage points of which can be attributed to stricter government regulations and bans are. In other words: Almost the entire break-in would have happened because people apparently no longer dared to go into the shops even without government orders. For fear of contagion, not of the law. No matter what they decided locally up there.
In other words: the historical slump would have come for the most part if the government had done nothing and had nothing closed.
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And to prevent the objection right away: The fact that the fear was so momentous does not seem to have been pure panic or simply controlled by evil virologists and governments. As Goolsbee and Syverson could also see from the data, fear and decreased movement were always particularly pronounced wherever a particularly large number of people had died of Covid-19 in the immediate vicinity, i.e. the risk of being infected was particularly noticeable and real - understandable. With or without a formal lockdown.
Even more: People increasingly avoided larger shops and department stores, less the smaller ones, where the contact risks were lower. That also speaks for a relatively reason-based fear, not hysteria.
Worse was the drop in demand from abroad
There are some indications that the results of the US researchers also apply to Germany. And that the imposed contact restrictions explain only a small part of the drop in economic output of almost ten percent this spring. In any case, the majority of the decline was caused by the disruption of supply chains and demand from abroad. While German industry from the rest of the world received significantly fewer orders in June - at minus 20 percent - than before the pandemic, domestic orders were even higher - probably not because there are no longer any contact restrictions, but rather because the acute fear of infection has subsided in view of the lower number of infections.
"Should the pandemic actually pick up speed again, it will have economic consequences - with or without a lockdown"
It is all the more critical that more people are now infected again - and the danger for everyone threatens to increase again.
For former Obama's chief adviser Goolsbee and his colleagues, there is also a political warning in all of this. If people's fear counts above all, it could be that in the end it is precisely those regions that will be hit hardest economically that relax too early - or wait too long to renew restrictions. Even if that is not decisive for the better or for the worse economically, it may well be in terms of health.
Should the actual deaths rise again, fear would also return in the regions concerned - which would hit the shops there, as it did from March to May, particularly. Seemingly paradoxical: possibly precisely where there are no major (too few) restrictions.
If there is any doubt, it is better to ensure that human contacts in the country are temporarily reduced when the infections pick up again a little too quickly than too late. Which does not mean that you implement it completely headlessly, as our Chancellor rarely attacks anyway. That could even help the economy because it limits damage.
The risks may not yet be so great. However, the spring evaluations show that if the pandemic really does pick up speed again, it will have economic consequences - with or without lockdown. The difference is: Without restrictions, according to all virologists' wisdom, the chances of keeping the matter under health would dwindle. Which would not be conducive to overcoming the economic crisis. It is better to slow the pandemic as early as possible - and, if necessary, get the next economic and rescue package off the ground.
Icon: The mirror
