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Last updated: June 15, 2020


COVID-19, Lockdowns and Well-Being: Evidence from Google Trend

The COVID-19 pandemic has led many governments to implement lockdowns. While lockdowns may help to contain the spread of the virus, they may result in substantial damage to population well-being. We use Google Trends data to test whether the lockdowns implemented in Europe and America led to changes in well-being related topic search terms. Using differences-in-differences and a regression discontinuity design to evaluate the causal effects of lockdown, we find a substantial increase in the search intensity for boredom in Europe and the US. We also found a significant increase in searches for loneliness, worry and sadness, while searches for stress, suicide and divorce on the contrary fell. Our results suggest that people’s mental health may have been severely affected by the lockdown.


Corona bonds, with or without Germany

This paper details how France could introduce Coronabonds without the participation of Germany, in concert with the European states that wanted them, via the creation of a European Treasury Agency, established by a Treaty of European Solidarity. The creation of the Coronabonds is an important element in assisting the economies of member states of the Eurozone, especially countries of the south (Italy and Spain). In addition, the introduction of a 30% tax on multinational profits would finance a deficit of 10% of GDP over a period of 5 to 7 years, by reversing the reductions in company tax rates that have occurred since 1980. The reduction in rates paid by multinationals weakens states’ resilience by undermining their capacity to fund public services; the latter will now benefit from financial support in this crisis period.


Modes of contagion, the spread of the virus and unidentified carriers

This paper studies contagion when information is scarce, spreaders are unknown, and people are contaminated through using the same device successively. Reducing the variance of the number of users via organizational measures always limits contagion, at no cost. This result partially extends to the oft-analysed simultaneous case. The gains from better organization can be substantial but they decrease with higher proportions of spreaders. This calls for early action at the beginning of an epidemic or after the end of a lockdown.


The optimal strategy for prevention and eradication of epidemics

This research uses integrated models to investigate the best response to epidemics, taking into account the effects of the disease on both population and economy, and the financial constraints on governments. The authors present a general two-compartment epidemic model and integrate it into a classic macroeconomic model in order to find the optimal strategy for the prevention and eradication of the epidemic. This theoretical work aims to strengthen the integration of mathematical epidemiological models into economic ones.


When to Release the Lockdown? A Wellbeing Framework for Analysing Costs and Benefits

It is politicians who have to decide when to release the lockdown, and in what way. In doing so, they have to balance many considerations (as with any decision). Often the different considerations appear incommensurable so that only the roughest of judgements can be made. For example, in the case of COVID-19, one has to compare the economic benefits of releasing the lockdown with the social and psychological benefits, and then compare the total of these with the increase in deaths that would result from an early exit. We here propose a way of doing this more systematically.


The Economic Cost of COVID Lockdowns: An Out-of-Equilibrium Analysis

We develop a model of production networks with out-of-equilibrium dynamics. The production network model allows us to study not only the direct cost of the lockdown but also indirect costs which emerge from the reductions in the availability of intermediate inputs. The model is calibrated to the world economy using input-output data on 56 industries in 44 countries including all major economies. Covid-19 lockdowns are implemented as partial reductions in the output of some sectors using data on sectoral decomposition of capacity reductions. We use computational experiments to replicate the temporal sequence of the lockdowns implement in different countries. China, Italy, Mexico, and France incur a high cost of the lockdowns as proportion of their GDP, while US, India, and Brazil are more moderately affected. World output falls by 7% at the early stage of the crisis when only China is under lockdown and by 23% at the peak of the crisis when many countries are under a lockdown. These direct impacts are amplified as the shock propagates through the world economy because of the buyer-seller relations. Supply-chain spillovers are capable of amplifying the direct impact by more than two folds.We also study the process of economic recovery following the end of the lockdowns. The world economy takes about one quarter to move towards the new equilibrium in the optimistic and unlikely scenario of the end of all lockdowns. Recovery time is likely to be significantly greater if partial lockdowns persist.