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The Economic Cost of Locking down like China: Evidence from City-to-City Truck Flows

Containing the COVID-19 pandemic by non-pharmacological interventions is costly. Using high-frequency, city-to-city truck flow data, this paper estimates the economic cost of lockdown in China, a stringent but effective policy. By comparing the truck flow change in the cities with and without lockdown, the authors find that a one-month full-scale lockdown causally reduces the truck flows connected to the locked down city in the month by 54%, implying a decline of city’s real income with the same proportion in a gravity model of city-to-city trade. The authors also structurally estimate the cost of lockdown in the gravity model, where the effects of lockdown can spill over to other cities through trade linkages. Imposing full-scale lockdown on four largest cities for one month would reduce the national real GDP by 8.6%, of which 11% is contributed by the spillover effects.

18
Aug
2022
Thursday

Session Chair: Jun PAN
Professor of Finance and SAIF Chair Professor, Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University and Senior Fellow, ABFER

10:00 am
The Economic Cost of Locking down like China: Evidence from City-to-City Truck Flows

Michael SONG, Professor, Department of Economics, Chinese University of Hong Kong and Senior Fellow, ABFER

Co-authors:
Jingjing CHEN, PhD Student, School of Economics and Management, Tsinghua University
Wei CHEN, Assistant Professor, School of Economics, Zhejiang University
Ernest LIU, Assistant Professor of Economics, Princeton University
Jie LUO, Assistant Professor, School of International Trade and Economics, University of International Business and Economics
10:25 am
Discussion
Discussant:
Elisa GIANNONE, Assistant Professor of Economics, The Pennsylvania State University
10:50 am
Q&A
11:10 am


Updated 27 July 2022

Speakers

  • Michael SONG

    Michael SONG

     

    Professor, Department of Economics, Chinese University of Hong Kong and Senior Fellow, ABFER

    Michael Song is a professor at the Department of Economics, Chinese University of Hong Kong (CUHK), an outstanding fellow of the Faculty of Social Science at CUHK, a co-director of CUHK-Tsinghua Joint Research Center for Chinese Economy and a distinguished visiting professor at the School of Economics and Management, Tsinghua University. His research focuses onChinese economy and macroeconomics. He published papers on leading academic journals including American Economic Review and Econometrica. His paper “Growing like China” won Sunyefang Economic Science Award and the Best Paper Award for Chinese Young Economists. Before joining CUHK, Prof. Song was an associate professor of economics at Chicago Booth. Prof. Song is also a co-editor of China Economic Review, an associate editor of Econometrica and Journal of European Economic Association and an academic committee member of China’s Economics Foundation.

  • Elisa GIANNONE

    Elisa GIANNONE

     

    Assistant Professor of Economics, The Pennsylvania State University

    Elisa Giannone is a Junior Researcher at CREI and a research affiliate at CEPR. She received her PhD in Economics from the University of Chicago in 2017, She was a Post-doctoral fellow at the International Economics Section at Princeton University in 2017/2018 and an Assistant Professor of Economics at Pennsylvania State University.

  • Jun PAN

    Jun PAN

     

    Professor of Finance, Shanghai Advanced Institute of Finance (SAIF), Shanghai Jiao Tong University and Senior Fellow, ABFER

    Jun Pan is currently a Professor of Finance and SAIF Chair Professor at Shanghai Advanced Institute of Finance (SAIF), Shanghai Jiao Tong University. Prior to joining SAIF in 2019, she was the School of Management Distinguished Professor of Finance and Professor of Finance at MIT Sloan School of Management. Jun has a B.S. degree in Physics from Shanghai Jiao Tong University, a Ph.D. in Physics from New York University, and a Ph.D. in Finance from Stanford University.

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Session Format

Each session lasts for 1 hour 10 minutes (25 minutes for the author, 25 minutes for the discussant and 20 minutes for participants' Q&A). Sessions will be recorded and posted on ABFER's web, except in cases where speakers or discussants request us not to.

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