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Regional Policy Spillovers and Complementarity in the Great Lockdown

Fri, Mar 19, 2021

Date & Time:12:00-13:00, Tue. 23rd, March 2021

Venue: Room 505, Tongji Building A

Speaker: HE Chao, East China Normal University

Abstract: Nonpharmaceutical interventions (NPIs) are a primary tool against pandemics. Should regional governments coordinate? If so, how? The answers depend on spatial spillovers and complementarity or substitutability of regional NPIs. This paper estimate the spillover effects of stay-at-home (SAH) orders on COVID-19 infection growth across out-of-state adjacent counties in the United States. We find that the spillover effects critically depend on the local implementation of SAH orders. With local SAH orders, the spillover effects reduce the daily case growth rate by 5.1 percentage points in the first three weeks of treatment, with an accumulative case reduction of 66.6 percent; otherwise, the spillover effects slightly increase the growth rate though statistically insignificant. Such strong complementarity suggests that NPIs are best implemented jointly, and there may be coordination failures among regional governments.

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