I don’t think the question can be answered as posed, because it is underspecified. In the comparative, realist case, however, I think it is overwhelmingly obvious that the impacts are positive—i.e. far less negative than not imposing them.
First, the question of economic effects is a comparative one, i.e. what will be the economic effects compared to not having quarantine. That means we’re asking about how much quarantine changes the economy compared to some other policy—and which one matters greatly. If the alternative is required masks in public, maximum gathering sizes of 5 people in a room, and physical distancing enforced by large fines, the difference is far smaller than if the alternative is a request to return to status quo ante.
Second, the question is also potentially either a counterfactual one, or a realist one. That is, either we are asking what the counterfactual economic effects are if we could control reaction completely, and not implement a quarantine, or we are asking what the world realistically looks like in a world where we do not implement a quarantine now. The second case is one where two weeks from today, as the death toll in the US and elsewhere mounts to currently unimaginable to the public levels, people would be demanding that politicians reverse course—and you would have even more strict quarantine, for longer, that is less effective due to the delay. If politicians were able to withstand this pressure, this might not be relevant, but it should be clear that in the US and most other places, they simply will not—when death tolls are in the 10s of thousands, and increasing rapidly, instead of holding course, they would reimpose the quarantine, if not overreact in the other direction. That would mean ordering months of full quarantine instead of weeks and slowly relaxing them when prudent, and instead going further than public health officials recommend, creating potentially even more severe economic impact.
I basically agree with “this question really depends on what the counterfactual is.” (And I personally guess the counterfactual is ‘knee-jerk-quarantine response in a couple weeks that is worse than swift action on all dimensions.’)
I still think the question is useful for a couple reasons:
Simplifying the problem
For “what policies should governments do, and/or what should people advocate for?”, the ultimate answer is pretty complex, includes “what you expect the government to do by default, and what do you think the easiest thing to get them to do instead.”
But, answering the simpler question of “how will this affect the economy” helps give some gears to inform the more complicated questions.
What sort of economic trends to brace for
If you think (as I do) that quarantine is basically inevitable, it still matters “what will happen to the economy tho?”, not for deciding what to do about coronavirus, but for how to plan the rest of your life.
I think of we’re talking about the counterfactual with the best tradeoffs, it might look something like quarantining the most vulnerable populations while having others get back to work.
I don’t think the question can be answered as posed, because it is underspecified. In the comparative, realist case, however, I think it is overwhelmingly obvious that the impacts are positive—i.e. far less negative than not imposing them.
First, the question of economic effects is a comparative one, i.e. what will be the economic effects compared to not having quarantine. That means we’re asking about how much quarantine changes the economy compared to some other policy—and which one matters greatly. If the alternative is required masks in public, maximum gathering sizes of 5 people in a room, and physical distancing enforced by large fines, the difference is far smaller than if the alternative is a request to return to status quo ante.
Second, the question is also potentially either a counterfactual one, or a realist one. That is, either we are asking what the counterfactual economic effects are if we could control reaction completely, and not implement a quarantine, or we are asking what the world realistically looks like in a world where we do not implement a quarantine now. The second case is one where two weeks from today, as the death toll in the US and elsewhere mounts to currently unimaginable to the public levels, people would be demanding that politicians reverse course—and you would have even more strict quarantine, for longer, that is less effective due to the delay. If politicians were able to withstand this pressure, this might not be relevant, but it should be clear that in the US and most other places, they simply will not—when death tolls are in the 10s of thousands, and increasing rapidly, instead of holding course, they would reimpose the quarantine, if not overreact in the other direction. That would mean ordering months of full quarantine instead of weeks and slowly relaxing them when prudent, and instead going further than public health officials recommend, creating potentially even more severe economic impact.
I basically agree with “this question really depends on what the counterfactual is.” (And I personally guess the counterfactual is ‘knee-jerk-quarantine response in a couple weeks that is worse than swift action on all dimensions.’)
I still think the question is useful for a couple reasons:
Simplifying the problem
For “what policies should governments do, and/or what should people advocate for?”, the ultimate answer is pretty complex, includes “what you expect the government to do by default, and what do you think the easiest thing to get them to do instead.”
But, answering the simpler question of “how will this affect the economy” helps give some gears to inform the more complicated questions.
What sort of economic trends to brace for
If you think (as I do) that quarantine is basically inevitable, it still matters “what will happen to the economy tho?”, not for deciding what to do about coronavirus, but for how to plan the rest of your life.
I think of we’re talking about the counterfactual with the best tradeoffs, it might look something like quarantining the most vulnerable populations while having others get back to work.