In one of the greatest novels of the 20th century, "The Plague", Albert Camus remarks: "(...) the enormous disarmed cranes, the wagons tipped aside, the lonely piles of barrels and sacks on quays were evidence that the plague had also killed the trade".
In the case of the COVID-19 pandemic, we all observed deserted shopping malls and despair of hotel and restaurant owners. A study published by the European project Periscope seeks to assess the impact of the restrictions on the economy.
The study used data from 27 European Union countries collected between February and August 2020. According to the study's authors Christian Dreger and Daniel Gros, previous work analysing the economic impact of the pandemic is not reliable because real economic data always arrives late.
How to measure social distance?
To assess the impact of the pandemic restrictions on the economy and the spread of the coronavirus, Dreger and Gros took into account two measures showing changes in real "social distance".
The first is the Oxford Stringency Index, which averages various measures to reduce infection rates, including school closures, cancellation of mass events and transport restrictions.
The second, more comprehensive, measure was based on reports from the internet giant Google. Google searches are powerful knowledge about users and society as a whole. However, they do not help us assess the degree of our physical mobility and frequency of contact.
According to Dreger and Gros, the increase in the values of both measures was associated with lower economic activity. In their view, however, a better measure is to base forecasts on real indicators, such as the Oxford restrictiveness index used. The higher the value of this index, the lower the production growth. In the case of Google activity, the results were not so clear.
As the authors of the analysis demonstrate, social distance and restrictions as measured by the Oxford Restrictiveness Index were most strongly associated with economic recession and subsequent recovery.
However, as they add, the results of their analysis should be interpreted with caution. The type of the statistics used makes it impossible to draw cause-and-effect conclusions.
Ailing economy and "cures for the future"
Since the first outbreaks of COVID-19 last year, most sectors of the economy have been closed. At the time, we knew little about the nature of the SARS-CoV-2 coronavirus. After more than a year, the knowledge that scientists have accumulated in that period should translate into designing restrictions that would avoid complete paralysis of the economy.
Some experts have already criticised "hard lockdowns" and come up with new solutions. For example, Martin Bodenstein's team has proposed a two-sector model introducing remote working in less important industries.
Many experts suggest that remote working applied to all industries, as opposed to, for example, selectively closing schools or individual workplaces, is a less effective tool in combating the pandemic.
The analysis conducted by Dreger and Gros is one of the works that will enable the design of forms of restriction that minimise the negative impact on the economy and social life.
As the authors conclude, restrictions ordering people to stay at home are less important than other preventive measures, but their impact on the economy is the greatest. As they write, "this type of measure has a low benefit-cost ratio and should be avoided".
In their view, other restrictions - such as those on public transport and mass gatherings - make more sense. In their view, an increase in the number of infections does not necessarily mean a weakening of the economy in every case - everything is a question of flexible and skilful application of regulations.
And once the pandemic is over, how do we assess the impact and the damage? How do we develop an action plan? The Periscope project brings together the best scientists and experts from 32 European universities, research institutes and think tanks. Gazeta Wyborcza is the only medium cooperating with them. The Periscope project is funded by the European Commission under the Horizon2020 programme.
Translated by Chris Borowski
This is a translation of the article from June 1, 2021.