NEW YORK – With a potential second wave of COVID-19 looming, government leaders across the globe must navigate ways to minimize economic losses while maximizing health and lives saved. Examining commuting patterns and lockdown measures in three major cities, Amit Khandelwal, Columbia Business School’s Jerome A. Chazen Professor of Global Business, argues that policymakers should abandon the blanket shutdown strategies commonly used in the first few months of the pandemic. 

Instead, new modeling shows that city leaders should focus on limiting shutdowns to transmission hubs, even if they are main sources of income, in order to curb the spread of disease and avoid major economic losses. 

The research, co-written with Princeton International Economics Professor Pablo D. Fajgelbaum, Assistant Professor of Economics at Southern Methodist University Wookun Kim, Phd student Cristiano Mantovani at Universitat Pompeu Fabra, and Adjunct Professor of Economics at Universitat Pompeu Fabra Edouard Schaal, studies how lockdowns and disease spread impacted commerce and in turn, wages, in Seoul and Daegu, South Korea and New York City. 

The study matches disease-tracking models to predict where the highest transmission rates should be in each city with trade models that track commuting and credit card spending. 

The researchers identify ways in which each of the three cities were able to strike an optimal balance between maximizing economic output and stemming the spread of COVID-19. If New York area leaders had followed the model, wages lost due to the pandemic may have been reduced by as much as 50% at the same case count. 

These results suggest that one-size-fits-all lockdown policies have an unnecessarily harsh impact. Using modeling to target areas for shutdown could be more effective policy, allowing commercial activity that could provide a significant economic boost with a minor impact on public health. 

Moving forward, this model could be applied to study the optimal spatial deployment of a vaccine in limited supply – a likely scenario – which, if deployed efficiently, will save thousands of lives around the globe. The study, Optimal Lockdown in a Commuting Network, is available online here. 

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