Is there a health-economy trade-off in the COVID crisis?

There's no evidence of a trade-off between health and the economy during COVID-19. In fact, there is a moderate correlation (r = -0.6) showing the opposite - countries with the worst economic decline tend to also have high death rates. Size of circles is proportional to excess death rate.

The response to the COVID-19 pandemic has often been framed as a balancing act of protecting the economy versus protecting public health. Arguments have been made that response measures such as tight lockdowns will protect lives but at the expense of economic damage.

To assess whether this assumed trade-off has played out in the course of the crisis the above scatterplot shows economic downturn in the second quarter of 2020 versus death rates from the virus for several different countries. The points are sized according to the excess death rate for each country.

These data show that the opposite of health-economy trade-off appears to have occurred. Countries that have best protected their economies have also generally suffered lower death rates, while countries which have experienced the worst economic decline in 2020 also have some of the highest COVID-19 death rates. Belgium is somewhat of an outlier in the plot above, and its high death rate has been attributed by officials in the country to a more rigorous counting of cases.

As ever when analysing COVID-19 data there are many other factors affecting the death rate and economic performance which are not taken into account in this analysis. These data do however give tentative preliminary evidence that the the trade-off between health and the economy so often spoken about has not materialised.