Lockdowns flatten the “economic curve,” too

Enlarge / The Oakland Municipal Auditorium in use as a temporary hospital during the 1918 flu pandemic.

The lockdown measures being taken in response to the coronavirus pandemic are causing economic turmoil. Faced with this, President Donald Trump balked at the prospect of continuing those measures long-term, tweeting, "WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF."

But in reality, the best economic medicine may be the dreaded lockdown. A working paper by economists at the Federal Reserve and MIT digs into data from the 1918 flu pandemic and finds that cities that reacted quickly and aggressively to the pandemic also had stronger economic growth after the crisis was over.

Looking backward

An armchair economist could happily predict the economic effects of a lockdown. Intuitively, freezing the economy of a city, state, or country by forcing everyone to stay home seems like it would be an unambiguously bad thing for that economy.