Economic impact of the most drastic lockdown during COVID-19 pandemic-The experience of Hubei, China

This paper uses a panel data approach to assess the evolution of economic consequences of the drastic lockdown policy in the epicenter of COVID-19-the Hubei Province of China during worldwide curbs on economic activity. We find that the drastic 76-day COVID-19 lockdown policy brought huge negative impacts on Hubei's economy. In 2020:q1, the lockdown quarter, the treatment effect on GDP was about 37% of the counterfactual. However, the drastic lockdown also brought the spread of COVID-19 under control in little more than two months. After the government lifted the lockdown in early April, the economy quickly recovered with the exception of passenger transportation sector which rebounded not as quickly as the rest of the general economy.

Automated summary

This paper evaluates the economic consequences of the 76-day lockdown policy in Hubei Province during the COVID-19 pandemic. The strict lockdown had a significant negative impact on the economy, but it also effectively controlled the spread of the virus. After the lockdown was lifted, the economy in Hubei quickly recovered, with the exception of the passenger transportation sector.