A note from Merrill Lynch comparing Denmark and Sweden which points to a significant implication according to the analysts.

Denmark and Sweden

  • the two countries diverged significantly in terms of health care outcomes
  • Denmark had 95 deaths per million people
  • Sweden had 363 per million (among the highest COVID-19 mortality rates in the world)
  • difference points to a large healthcare benefit from lockdown policies

What about the economic costs?

  • consumer spending dropped by 25% in Sweden
  • by 29% in Denmark
  • The 4pp difference between the two declines quantifies the cost of lockdown policies
  • 4% of consumer spending is not trivial, it is a small share of the total decrease in consumer spending
  • Therefore the data indicate that most of the slowdown occurred due to voluntary social distancing rather than lockdown policies.

If the paper's results are applicable to other countries … implications:

  • Even as restrictions are lifted, consumer spending will likely remain highly impaired, with services getting hit the hardest
  • In summary, the economic downturn has been primarily because of the virus, not the policy response.


'Services hit the hardest' is what we are seeing in the data for Asian countries that are ahead of the curve on recovery.