From Paulina Neudling and Tino Sanandaji:
There are now alarming reports that the virus has spread to one-third of nursing homes in Stockholm, which has resulted in rising fatalities. While it is true that Swedes rarely live with their parents, older citizens are hardly isolated: The Scandinavian model simply outsources care from families to caretakers who visit dozens of clients every week. Caretakers are rarely tested for the virus but have simply been urged to stay at home if and shortly after experiencing symptoms.
Nor is there much indication that the Swedish economy is weathering the storm better than comparable countries. The drop in the stock market and the rise in unemployment are roughly in line with other advanced economies. According to official Swedish estimates, Sweden’s GDP is expected to contract by 3.4 percent this year, which is better than the 5.5 percent decline projected in a euro zone dragged down by Italy and Spain, but worse than the 2.9 percent decline prognosticated for the United States. If these prognoses are accurate, the Swedish experiment might indicate that the economic effects of the pandemic cannot be escaped by a laissez-faire approach, but that the crash is mainly driven by declining global demand, disruption in production chains, and a collective fear and loss of confidence among billions across the globe.
Another lesson in policy evaluation is that we should avoid jumping to conclusions based on “just-so” narratives before taking the time lag into account.