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Why did we release lockdown too early? Perhaps because we started too late.

Summary:
It has been much commented on that the UK entered its lockdown to combat covid19 too late.  This had the consequence of allowing the virus to gain more of a foothold, generating an increasing flow of infections that quickly swamped our test and trace capacity at that point. That in turn had the effect of meaning that the lockdown we did introduce needed to be in place for longer than otherwise.  The lockdown has the effect of reducing the reproductive rate of the virus, by reducing the number of contacts we have and the infections produced from them.  If the number of cases that our test and trace capacity can deal with is X, and we start from a number greater than that, Y, a reproductive rate of the virus that is less than 1 can convert Y into X over a certain time period, as

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It has been much commented on that the UK entered its lockdown to combat covid19 too late.  This had the consequence of allowing the virus to gain more of a foothold, generating an increasing flow of infections that quickly swamped our test and trace capacity at that point.

That in turn had the effect of meaning that the lockdown we did introduce needed to be in place for longer than otherwise.  The lockdown has the effect of reducing the reproductive rate of the virus, by reducing the number of contacts we have and the infections produced from them.  If the number of cases that our test and trace capacity can deal with is X, and we start from a number greater than that, Y, a reproductive rate of the virus that is less than 1 can convert Y into X over a certain time period, as infections cycle through the population.  If you start from a number greater even than Y, that lower reproductive rate has to do its work for longer.  [Or, equivalently, you would need a tighter and more costlier lockdown for the same amount of time].

Locking down the economy involves an enforced shuttering of some sectors of the economy, depriving those who work in them of their income, and the rest of us of their outputs.  The Governing party bore the political costs of this, and had to do it knowing that the costs come before the benefits [successful suppression of the virus at some date into the future].   Intertemporal sacrifices of this kind are notoriously hard for a government to make.  The UK governing party also had a significant strain of covid19 denialism;  and the interventions entailed by the lockdown and the income replacement schemed accompanying it ran counter to its [at least pre-Brexit] laissez-faire instincts.  For these reasons, it’s likely that there were forces acting to shorten the lockdown distinct from those connected with the public health rationale.

The decision to begin relaxing the lockdown, at a case load that was arguably high relative to our capacity to test and trace – the way of to define ‘early’ – is therefore potentially a consequence of starting the lockdown too late.   [‘Late’ defined analogously, as in ‘time elapsed once it became clear that the virus would, absent intervention, or alread had, exceeded test and trace capacity’].

You would normally hope that a social system had in-built mechanisms to self-correct and learn from its mistakes.  But this seems to be a candidate illustration of the opposite.  One tragic policy error necessitates another, compounding one.

Tony Yates
Economist. Consulting, lecturing, a book. Ex Prof at Bham, Ex BoE staffer. Macro, policy, monetary econ, occasional nonsense.

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