Cost of shutdowns to US businesses is hefty $227 billion: Study, Latest World News - The New Paper

Cost of shutdowns to US businesses is hefty $227 billion: Study

This article is more than 12 months old

WASHINGTON: There is little doubt that business shutdowns to stop the spread of Covid-19 damaged the US economy, but the exact cost has not been clear.

Researchers from HEC Paris business school and Bocconi University in Milan have reached a sobering calculation: The closures beginning at the pandemic's onset in March through May saved 29,000 lives - at a cost of US$169 billion (S$227 billion), or around US$6 million each person.

"Governors saved lives on the one hand but reduced economic activity on the other," Professor Jean-Noel Barrot at HEC Paris and member of France's National Assembly said.

How to address the world's largest coronavirus outbreak has become a vexing, politically charged question in the US, where the virus has infected more than 12.7 million people and killed more than 263,000.

Virus cases are surging nationwide, prompting many states to again implement restrictions on businesses. But Prof Barrot warned that changes in behaviour may make renewed business restrictions less effective.

"As people become, perhaps, more responsible, as they wear more masks and so on, the effect that we're seeing on infection is going to probably go down."

A Nature journal study found that without social distancing and business restrictions, US' cases would have hit 5.2 million in early April, rather than their actual level of around 365,000. - AFP