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Lockdown Fatigue: the Diminishing Effects of Quarantines on the Spread of COVID-19 1 Patricio Goldstein, Eduardo Levy Yeyati and Luca Sartorio

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Lockdown Fatigue: the Diminishing Effects of Quarantines on the Spread of COVID-19 1 Patricio Goldstein, Eduardo Levy Yeyati and Luca Sartorio COVID ECONOMICS VETTED AND REAL-TIME PAPERS ISSUE 67 4 FEBRUARY 2021 LOCKDOWN FATIGUE Patricio Goldstein, Eduardo Levy Yeyati and Luca Sartorio RECOVERY IN UK CONSUMPTION COST-BENEFITS OF POLICY John Gathergood, Fabian Gunzinger, INTERVENTIONS IN THE US 2 Benedict Guttman-Kenney, James Broughel and Michael Kotrous Edika Quispe-Torreblanca YOUNG LIVES INTERRUPTED and Neil Stewart Marta Favara, Richard Freund, CRISIS MANAGEMENT Catherine Porter, Alan Sánchez Fei Li and Jidong Zhou and Douglas Scott COST-BENEFITS OF POLICY MACROEPIDEMICS INTERVENTIONS IN THE US 1 Verónica Acurio Vásconez, James L. Doti Olivier Damette and David W. Shanafelt Covid Economics Vetted and Real-Time Papers Covid Economics, Vetted and Real-Time Papers, from CEPR, brings together formal investigations on the economic issues emanating from the Covid outbreak, based on explicit theory and/or empirical evidence, to improve the knowledge base. Founder: Beatrice Weder di Mauro, President of CEPR Editor: Charles Wyplosz, Graduate Institute Geneva and CEPR Contact: Submissions should be made at https://portal.cepr.org/call-papers- covid-economics. Other queries should be sent to [email protected]. Copyright for the papers appearing in this issue of Covid Economics: Vetted and Real-Time Papers is held by the individual authors. The Centre for Economic Policy Research (CEPR) The Centre for Economic Policy Research (CEPR) is a network of over 1,500 research economists based mostly in European universities. The Centre’s goal is twofold: to promote world-class research, and to get the policy-relevant results into the hands of key decision-makers. CEPR’s guiding principle is ‘Research excellence with policy relevance’. A registered charity since it was founded in 1983, CEPR is independent of all public and private interest groups. It takes no institutional stand on economic policy matters and its core funding comes from its Institutional Members and sales of publications. Because it draws on such a large network of researchers, its output reflects a broad spectrum of individual viewpoints as well as perspectives drawn from civil society. CEPR research may include views on policy, but the Trustees of the Centre do not give prior review to its publications. The opinions expressed in this report are those of the authors and not those of CEPR. Chair of the Board Sir Charlie Bean Founder and Honorary President Richard Portes President Beatrice Weder di Mauro Vice Presidents Maristella Botticini Ugo Panizza Philippe Martin Hélène Rey Chief Executive Officer Tessa Ogden Editorial Board Beatrice Weder di Mauro, CEPR Tom Kompas, University of Melbourne and Charles Wyplosz, Graduate Institute Geneva CEBRA and CEPR Miklós Koren, Central European University Viral V. Acharya, Stern School of Business, and CEPR NYU and CEPR Anton Korinek, University of Virginia and Guido Alfani, Bocconi University and CEPR CEPR Franklin Allen, Imperial College Business Michael Kuhn, International Institute for School and CEPR Applied Systems Analysis and Wittgenstein Michele Belot, Cornell University and CEPR Centre David Bloom, Harvard T.H. Chan School of Maarten Lindeboom, Vrije Universiteit Public Health Amsterdam Tito Boeri, Bocconi University and CEPR Philippe Martin, Sciences Po and CEPR Alison Booth, University of Essex and CEPR Warwick McKibbin, ANU College of Asia and Markus K Brunnermeier, Princeton the Pacific University and CEPR Kevin Hjortshøj O’Rourke, NYU Abu Dhabi Michael C Burda, Humboldt Universitaet zu and CEPR Berlin and CEPR Evi Pappa, European University Institute and Luis Cabral, New York University and CEPR CEPR Paola Conconi, ECARES, Universite Libre de Barbara Petrongolo, Queen Mary University, Bruxelles and CEPR London, LSE and CEPR Giancarlo Corsetti, University of Cambridge Richard Portes, London Business School and and CEPR CEPR Fiorella De Fiore, Bank for International Carol Propper, Imperial College London and Settlements and CEPR CEPR Mathias Dewatripont, ECARES, Universite Lucrezia Reichlin, London Business School Libre de Bruxelles and CEPR and CEPR Jonathan Dingel, University of Chicago Booth Ricardo Reis, London School of Economics School and CEPR and CEPR Barry Eichengreen, University of California, Hélène Rey, London Business School and Berkeley and CEPR CEPR Simon J Evenett, University of St Gallen and Dominic Rohner, University of Lausanne and CEPR CEPR Maryam Farboodi, MIT and CEPR Paola Sapienza, Northwestern University and Antonio Fatás, INSEAD Singapore and CEPR CEPR Pierre-Yves Geoffard, Paris School of Moritz Schularick, University of Bonn and Economics and CEPR CEPR Francesco Giavazzi, Bocconi University and Paul Seabright, Toulouse School of CEPR Economics and CEPR Christian Gollier, Toulouse School of Flavio Toxvaerd, University of Cambridge Economics and CEPR Christoph Trebesch, Christian-Albrechts- Timothy J. Hatton, University of Essex and Universitaet zu Kiel and CEPR CEPR Karen-Helene Ulltveit-Moe, University of Ethan Ilzetzki, London School of Economics Oslo and CEPR and CEPR Jan C. van Ours, Erasmus University Beata Javorcik, EBRD and CEPR Rotterdam and CEPR Simon Johnson, MIT and CEPR Thierry Verdier, Paris School of Economics Sebnem Kalemli-Ozcan, University of and CEPR Maryland and CEPR Rik Frehen Ethics Covid Economics will feature high quality analyses of economic aspects of the health crisis. However, the pandemic also raises a number of complex ethical issues. Economists tend to think about trade-offs, in this case lives vs. costs, patient selection at a time of scarcity, and more. In the spirit of academic freedom, neither the Editors of Covid Economics nor CEPR take a stand on these issues and therefore do not bear any responsibility for views expressed in the articles. Submission to professional journals The following journals have indicated that they will accept submissions of papers featured in Covid Economics because they are working papers. Most expect revised versions. This list will be updated regularly. American Economic Journal, Applied Journal of Economic Theory Economics Journal of the European Economic American Economic Journal, Association* Economic Policy Journal of Finance American Economic Journal, Journal of Financial Economics Macroeconomics Journal of Health Economics American Economic Journal, Journal of International Economics Microeconomics Journal of Labor Economics* American Economic Review Journal of Monetary Economics American Economic Review, Insights Journal of Public Economics American Journal of Health Journal of Public Finance and Public Economics Choice Canadian Journal of Economics Journal of Political Economy Econometrica* Journal of Population Economics Economic Journal Quarterly Journal of Economics Economics of Disasters and Climate Review of Corporate Finance Studies* Change Review of Economics and Statistics International Economic Review Review of Economic Studies* Journal of Development Economics Review of Financial Studies Journal of Econometrics* Journal of Economic Growth (*) Must be a significantly revised and extended version of the paper featured in Covid Economics. Covid Economics Vetted and Real-Time Papers Issue 67, 4 February 2021 Contents Lockdown fatigue: The diminishing effects of quarantines on the spread of COVID-19 1 Patricio Goldstein, Eduardo Levy Yeyati and Luca Sartorio Levelling down and the COVID-19 lockdowns: Uneven regional recovery in UK consumer spending 24 John Gathergood, Fabian Gunzinger, Benedict Guttman-Kenney, Edika Quispe-Torreblanca and Neil Stewart A model of crisis management 53 Fei Li and Jidong Zhou Benefit-cost analysis of COVID-19 policy intervention at the state and national level 94 James L. Doti The benefits of Coronavirus suppression: A cost-benefit analysis of the response to the first wave of COVID-19 in the United States 128 James Broughel and Michael Kotrous Young lives, interrupted: Short-term effects of the COVID-19 pandemic on adolescents in low- and middle-income countries 172 Marta Favara, Richard Freund, Catherine Porter, Alan Sánchez and Douglas Scott Macroepidemics and unconventional monetary policy: Coupling macroeconomics and epidemiology in a financial DSGE-SIR framework 199 Verónica Acurio Vásconez, Olivier Damette and David W. Shanafelt 1 Covid Economics Issue 67, 4 February 2021 Lockdown fatigue: The diminishing effects of quarantines on the spread of COVID-19 Patricio Goldstein,1 Eduardo Levy Yeyati2 and Luca Sartorio3 Date submitted: 1 February 2021; Date accepted: 2 February 2021 Non-Pharmaceutical Interventions (NPIs) have been for most countries the key policy instrument utilized to contain the impact of the COVID-19 pandemic. In this article, we conduct an empirical analysis of the impact of these policies on the virus’ transmission and death toll, for a panel of 152 countries, from the start of the pandemic through December 31, 2020. We find that lockdowns tend to significantly reduce the spread of the virus and the number of related deaths. We also show that this benign impact declines over time: after four months of strict lockdown, NPIs have a significantly weaker contribution in terms of their effect in reducing COVID-19 related fatalities. Part of the fading effect of quarantines could be attributed to an increasing non-compliance with mobility restrictions, as reflected in our estimates of a declining effect of lockdowns on measures of actual mobility. However, we additionally find that a reduction in de facto mobility also exhibits a diminishing effect Covid Economics 67, 4 February 2021: 1-23 on health outcomes,
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