Social Distancing Requirements and the Determinants of the COVID-19 Recession and Recovery in Europe
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DOI: 10.1007/s10272-020-0935-8
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Christian Dreger and Daniel Gros*
Social Distancing Requirements and the Determinants of the COVID-19 Recession and Recovery in Europe The COVID-19 pandemic led to an unprecedented decline in economic activity. Starting in February 2020, policymakers around the globe introduced emergency measures to slow down the spread of the virus, such as social distancing and the cancellation of events, limitations to mobility and travel, and the shutdown of large parts of the economy, including firms, workplaces and schools.
Many restrictions introduced in March were gradually lifted as the number of new infections decreased. Starting in early summer, however, infections were on the rise again, partially driven by gatherings at local virus hotspots and the summer holidays. The rise is particularly striking in Spain, where the number of new infections exceed the © The Author(s) 2020. Open Access: This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (https://creativecommons.org/licenses/by/4.0/).
Christian Dreger, European University Viadrina, Frankfurt (Oder), Germany.
Open Access funding provided by ZBW – Leibniz Information Centre for Economics. *
Daniel Gros, Centre for European Policy Studies, Brussels, Belgium.
ZBW – Leibniz Information Centre for Economics
This research has received funding from the European Union’s Horizon 2020 research and innovation program “PERISCOPE: Pan European Response to the ImpactS of COvid-19 and future Pandemics and Epidemics”, under the grant agreement No. 101016233, H2020SC1-PHE_CORONAVIRUS-2020-2-RTD.
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Figure 1 Number of new COVID-19 infections and deaths in large EU countries, 2020 New COVID-19 infections
Deaths
5,000
800
4,000
France
2,000
Italy
400 Spain
Germany
1,000 0
600
Spain
3,000
France
200 Germany
Italy Feb.
Mar.
Apr.
May
June
July
Aug.
0
Feb.
Mar.
Apr.
May
June
July
Aug.
Source: John Hopkins Coronavirus Resource Center, Johns Hopkins University, Baltimore.
previous peak from April. Despite the increase of new infections, the number of deaths has remained relatively low (Figure 1 shows data for the four largest EU countries). A key issue at this point is what effect the resurgence of infections will have on the economy. The need to ‘flatten the curve’ justified the harsh restrictions (‘lockdown’) imposed in March/April of 2020 (Baldwin and Weder di Mauro (2020a, b). The situation is different in the autumn of 2020, with far fewer fatalities as shown in Figure 1. The question at this point is how to disentangle the impact of different factors on the economy, such as infections, deaths, mobility and social distancing restrictions. The appropriate design of policies is critical, as massive losses can be involved. However, empirical evidence on the impact of the respective measures is scarce. Several studies discuss the impact of non-pharmaceutical interventions on the state of the pandemic, such as the growth of infection
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