Washington Post Invents a Growth Dividend from Sweden’s Coronavirus Strategy

June 04, 2020

Sweden has stood apart from most other wealthy countries in dealing with the pandemic, by not imposing some sort of shutdown, where non-essential businesses are closed and travel is kept to a minimum. Its Nordic neighbors all went this route and then engaged in extensive testing and tracing strategies.

As a result, Sweden has seen a much higher infection and fatality rate than the other Nordic countries. Sweden’s fatality rate to date is 450 per million, which compares to 101 per million for Denmark, 58 per million for Norway, and 44 per million for Finland.

Even worse, while these other countries all seem to have the pandemic well under control, infection rates and deaths remain high in Sweden. Yesterday there were two coronavirus related deaths in Denmark, one in Finland and none in Norway. Sweden had 74 deaths. (Sweden’s population is roughly twice the size of each of the other three Nordic countries.) Sweden’s track record in containing in the spread of the pandemic has clearly been abysmal.

However, the Washington Post holds out the prospect that Sweden has at least had an economic benefit from going the no shutdown route, telling readers:

“And because Sweden’s economy is tightly bound to the rest of Europe’s, it also has suffered, although not as badly as others.”

While it is true that it does not appear that Sweden’s economy will shrink as much as hard-hit countries like Italy and Spain, the I.M.F. projects that it will actually do worse in 2020 than its Nordic neighbors. The I.M.F. projects that Sweden’s economy will shrink by 6.8 percent in 2020. That compares to projected declines of 6.5 percent in Denmark, 6.3 percent in Norway, and 6.0 percent in Finland. In short, contrary to what the Post piece implies, there is little evidence that Sweden has gotten any economic benefit from its no shutdown strategy.

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