‘Lockdown Lite’ Spares Economies but Doesn’t End Pandemic

“We’ve learned a whole lot in terms of how to deal with this pandemic,” Gita Gopinath, chief economist at the International Monetary Fund, said in an interview Tuesday at The Wall Street Journal CEO Council annual summit.

She said the virus is being attacked “in a more targeted way”— Lockdowns are reserved for where cases are growing exponentially; higher-risk settings such as restaurants and bars are subject to limitations; and schools, which have proven relatively safe, stay open for the most part.

Still, targeted restrictions in Europe haven’t brought infections down as far as in the spring. The U.S. has yet to suffer much economic setback from its current wave, but its limited restrictions have yet to reverse the rise in infections.

France has just demonstrated that lighter lockdowns can work. At the end of October, as per capita cases skyrocketed to among the highest of advanced countries, President Emmanuel Macron imposed a new lockdown. It began to ease after one month, compared to two months for the first one, and covered fewer sectors.

“In the spring, for about two weeks, construction activity nearly totally stopped,” said Helene Baudchon, senior economist at BNP Paribas— one reason France’s economy suffered so much more than Germany’s. Transportation-equipment manufacturing plummeted 69% below normal levels.

By contrast, construction, manufacturing and schools all continue to operate during the second lockdown. Remote work is more widespread and nonessential employees who can’t work remotely can travel to their jobs. Mobility data show workplace visits fell far less than retail and recreational visits.

The lockdown succeeded in reducing France’s infections from around 800 per million people per day, one of the highest among advanced countries, to 175, compared to around 600 in the U.S. The death toll is so far lower than in the first wave, though that may change.

Nonetheless, the current wave appears to have been contained at a lower economic price than the first. Whereas economic activity fell to just 71% of normal in April according to Insee, the French statistics agency, it stood at 88% in November, and is projected to rebound to 92% in December.

“There is a tradeoff between the health and economic situation,” said Ms. Baudchon. “In the first lockdown the tradeoff was fully in favor of health and the price was a massive recessionary shock.” The tradeoff this time is different, thanks to mask-wearing, adaption to those restrictions still in place, improved Covid-19 patient outcomes and the desire to avoid recession, she said.

However, infections have stopped falling, and remain much higher than Mr. Macron wants, endangering his plans to lift the remaining restrictions in time for the Christmas season.

The dilemma is that whenever mobility rebounds, so, eventually, do infections. “That will never fully resolve itself until you get to herd immunity,” Ms. Gopinath said, “because everybody’s getting infected or because of the vaccines.” 

Targeted restrictions reflect research indicating that a focus on super-spreading settings, such as large indoor gatherings, restaurants and bars, and requiring masks can slow transmission at a much lower cost than full lockdown. That is how California, Texas and Arizona reversed their summer waves.

Still, some governors have been slow to reimpose restrictions out of concern for battered businesses and, in some states, because of court orders. In some places, bars are open but schools are closed, the reverse of what public-health experts recommend. Some experts say widespread rapid testing, by identifying and isolating most infectious people, could end the pandemic without lockdowns, but no U.S. state has implemented such a system.

The current wave hasn’t spared states with restrictions. Much of California never fully reopened, and it boasts one of the country’s lowest per capita death rates. Nonetheless, cases there are now climbing swiftly.

North and South Dakota, which until recently imposed almost no restrictions or mask requirements, lead the country in per capita deaths. But Rhode Island’s death rate is also near the top, though it has required masks since the spring and limited social gatherings to 10 people in late October.

Indiana University economist Kosali Simon and co-authors found that state and local social-distancing orders explained about 40% of the decline in mobility in the spring, and lifting them explained even less of the subsequent rise in mobility. That suggests personal perceptions of risk drives behavior as much, if not more, as government edicts.

By the same token, fatigue with restrictions and rising risk tolerance by the young probably explains a lot of the recent surge, Ms. Kosali said.

Rhode Island Gov. Gina Raimondo concurs. On Nov. 19 she declared, “Although we all seem to think we’re following the rules, clearly we’re not because we’re in a really bad place.”

Ms. Raimondo announced that bars, gyms and casinos would close and restaurants and churches would operate at reduced capacity effective Nov. 30 for two weeks, and if that doesn’t turn the tide, a “total lockdown” would follow.

“I’m in a world of all bad choices. I am trying to get us through to the end of the year…with limited…harm to health and to our long-term economy.”

Write to Greg Ip at [email protected]