"Our current recession is not caused by the pandemic, but the lockdown response to it."
I was initially going to post this to refute freddie_mercury, but when I looked at the data it's more suggestive that he's right, and the recession actually is caused by the pandemic.
We can examine this by looking at countries that had no lockdowns and seeing how they did relative to countries that did.
Taiwan had no lockdown, instead relying on incredibly strict quarantine procedures, robust contact-tracing, and being an island. South Korea also had no lockdown, but managed a few surges through very thorough test, trace, & isolate procedures. Those two countries had the smallest economic declines, with Taiwan barely registering a recession at -0.6% and South Korea at -3%:
New Zealand had a very strict lockdown in March and April, a steep recession (-17%), but then eradicated COVID and ended the lockdown. They had a sharp V-shaped recovery (+14%) in Q4:
But there's a potential conflating effect: the countries without lockdowns usually lacked them because they didn't have many cases. To remove the conflating effect, we can look at Sweden, which had no lockdown but lots of COVID cases (and more deaths than its neighbors). Sweden had a -8.3% fall in its Q2 GDP. By comparison, Norway (strict lockdown, few cases) had -5.3%, Denmark (strict lockdown, fair number of cases) had -8.5%, and the UK (initially no lockdown but reversed course when they had lots of cases) had -21.7%.
This would seem to indicate that it's the pandemic itself (and resulting societal fear) rather than the lockdown that caused the GDP fall.
I was initially going to post this to refute freddie_mercury, but when I looked at the data it's more suggestive that he's right, and the recession actually is caused by the pandemic.
We can examine this by looking at countries that had no lockdowns and seeing how they did relative to countries that did.
Taiwan had no lockdown, instead relying on incredibly strict quarantine procedures, robust contact-tracing, and being an island. South Korea also had no lockdown, but managed a few surges through very thorough test, trace, & isolate procedures. Those two countries had the smallest economic declines, with Taiwan barely registering a recession at -0.6% and South Korea at -3%:
https://www.taiwannews.com.tw/en/news/4008495
New Zealand had a very strict lockdown in March and April, a steep recession (-17%), but then eradicated COVID and ended the lockdown. They had a sharp V-shaped recovery (+14%) in Q4:
https://www.nzherald.co.nz/business/nz-economy-bounces-out-o...
But there's a potential conflating effect: the countries without lockdowns usually lacked them because they didn't have many cases. To remove the conflating effect, we can look at Sweden, which had no lockdown but lots of COVID cases (and more deaths than its neighbors). Sweden had a -8.3% fall in its Q2 GDP. By comparison, Norway (strict lockdown, few cases) had -5.3%, Denmark (strict lockdown, fair number of cases) had -8.5%, and the UK (initially no lockdown but reversed course when they had lots of cases) had -21.7%.
This would seem to indicate that it's the pandemic itself (and resulting societal fear) rather than the lockdown that caused the GDP fall.