The Cost of COVID-19 : A Rough Estimate of the 2020 U.S. GDP

This paper provides an early estimate of the economic effects of the national quarantine policy associated with the COVID-19 pandemic in the United States. Using a measure of digital intensity from Gallipoli and Makridis (2018), we exploit counties' exposure to industries that vary in their digital intensity as a proxy for the adverse effects of the decline in physical activity and in-person shutdown. Our baseline estimates suggest that the average county experiences a 5% decline in real GDP growth for two months of economic shutdown, which amounts to $2.14 trillion. Our results also suggest that the effects are highly heterogeneous across countries: for example, the most adversely affected counties may experience as much as a 15% decline in real GDP growth. Counties with higher shares of college graduates, digital workers, and higher median household income are less adversely affected, whereas those with higher shares of non-tradables employment are more affected