Here are some random thoughts on lockdowns:
1) They can be right ex ante from a Knightian Uncertainty-driven cautiousness or robustness principle, even if they turn out to be ex post too harsh.
1) They can be right ex ante from a Knightian Uncertainty-driven cautiousness or robustness principle, even if they turn out to be ex post too harsh.
2) They can have an important Delphic signalling value (the way we are discussing it in monetary policy) a la the government signalling that shit hit the fan. In countries like Germany, who are a bit more etatistic than, say, the US, this effect might be large.
This means, in particular, that after the lockdown is in place you might actually be able to get rid of it, especially if you could somehow hide it from the people (see more on this below).
This could also explain the relatively benign behavior of the pandemic in Sweden (although death numbers are not so benign after all): once all countries around Sweden had declared a lockdown, your population got the signal already and voluntarily behaved accordingly.
3) Lockdowns serve as a coordination device. They save the real costs of millions and millions of private bargaining processes: between employees and employers - who goes in for production under what conditions?; husbands and wives - who takes care of the children?, etc.
4) The Delphic effect can be there in reverse when you abandon a shutdown too casually and quickly (like, I am afraid, they are doing currently in Germany). You might signal the public too early that shit has left the fan. Pictures like this could be indicative of this:
