Reflecting Upon the Costs of Lockdown

Abstract

This paper endeavours to show that the indirect, downstream and long-term costs of a mandated lockdown in response to severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) producing coronavirus disease 2019 (COVID-19) are too often ignored. The New Zealand Government did not much talk about them at the time it implemented a strict lockdown based upon its elimination strategy. Yet rational public policy requires these costs need to be taken into account and weighed against the benefits of the strict lockdown approach that New Zealand adopted. Furthermore, the costs and benefits of a milder mitigation strategy (of the kind Sweden adopted) also need to be estimated and compared to the strict lockdown approach. I argue the mitigation strategy was and is a preferable one once the indirect and long-term costs and benefits are taken into account.

Keywords: COVID-19, lockdown, mitigation approach, elimination costs, New Zealand

JEL Classification: K10, I118