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Scott Duke Kominers

Pandemic Shutdowns Work for the Economy, Too

Cities that clamped down early and longer in the Spanish flu outbreak had faster growth once the danger passed.

A little more distance would be even better.

A little more distance would be even better.

Photographer: Bettmann/Getty Images

With large swaths of the country turning to social distancing to reduce the spread of the coronavirus, economic activity has taken a big hit. This has led some, including President Donald Trump, to suggest that the “the cure” might “be worse than the problem” and to argue for easing distancing measures in a couple of weeks to get the economy back up and running as soon as possible. A new paper suggests that idea has it precisely backward.

The study, by economists Sergio Correia, Stephan Luck and Emil Verner looks at the economic impact of the 1918 Spanish flu pandemic in the U.S. The authors combined data on mortality and economic variables from the period with evidence on local implementation of so-called non-pharmaceutical interventions like social distancing.  They conclude that the earlier, more forcefully and longer cities responded, the better their economic recovery.