Many governments are slowly unwinding their economies from nationwide lockdowns. However, re-opening the economy entails a serious trade-off between fostering economic output and keeping the spread of infection low. This column reports several re-opening scenarios for the UK economy, documenting their projected impacts on both GDP and the spread of the virus. The results suggest that it is best to re-open upstream industries first, as they provide a large direct and indirect economic boost at a relatively lower cost in terms of further epidemic spreading.
Pichler, A., Pangallo, M., del Rio-Chanona, R., Lafond, F. & Farmer, J.D. (2020). 'Production networks and epidemic spreading: Re-opening the UK economy'. VoxEU.org Column, 7th June 2020. Retrieved from: https://voxeu.org/article/production-networks-and-epidemic-spreading-re-opening-uk-economy