According to the federal leadership of Goldman Sachs, a federal face mask mandate will not only slow down the daily growth rate of new confirmed cases of Covid-19, but can also save the US economy from a 5% GDP hit instead of additional blockages.
Jan Hatzius, Goldman’s chief economist, said his team investigated the relationship between face masks and Covid-19 health and economic outcomes and found that facial coatings were associated with significant and statistically significant results.
“We find that face masks are associated with significantly better coronavirus results,” Hatsius wrote in a note to clients. “Our baseline estimate is that a national mandate can increase the percentage of people who wear masks by 15 (percentage points) and reduce the daily growth rate of confirmed cases by 1.0 (percentage point) to 0.6%.”
“These calculations imply that the mask’s mandate could potentially replace locks that would otherwise deduct almost 5% of GDP,” the economist added.
At first, he focused on the extent to which the actual use of face masks reduces the level of infection with Covid-19, examining differences in population behavior by state. For example, Hatizus found that only about 40% of respondents in Arizona say they “always” wear masks in public places, compared to almost 80% in Massachusetts.
Goldman then analyzed the impact of mandates issued by 20 US states and the District of Columbia from April 8 to June 24, and compared it to the actual use of a face mask in public places using data from YouGov Covid-19 respondents.
The results are “large and very significant” and show that state mandates increase the percentage of people who say they “always” or “often” wear masks by about 25 percentage points within 30 days of a government order.
Meanwhile, a group of people who say that they “always” wear masks jumps 40 percentage points more than 30 days after the mandate. This result suggests that order forces people who previously said that they “often” wear masks to “always” wear them.
Critically, Hatizus says, wearing face masks has a causal effect on the level of new cases of Covid-19 infection. This data is not weakened if it is necessary to control fewer public trips or to avoid large gatherings.
In general, Goldman’s base case is that a national mask-wearing mandate can increase the percentage of Americans wearing masks by 15 percentage points and reduce the daily growth rate of confirmed cases by 1 percentage point to 0.6%.
The investment bank then translated these results into terms of GDP, asking how serious any restrictions on the part of the government should be to reduce the number of infections by 1 percentage point. To do this, Hatsius compared the gravity of previous U.S. locks to how the U.S. economy has responded to state-imposed business closures.
Goldman estimates that localization efforts — both official government restrictions and actual social disagreements — earlier this year deducted 17% of US GDP from January through April. Other countries with even more aggressive restrictions saw even greater economic benefits.
Using these results and the goal of reducing daily growth by 1 percentage point, Goldman Sachs found that a face mask mandate could potentially replace locks that would otherwise deduct almost 5% of GDP.
“If a facial mask mandate significantly reduces coronavirus infections, this can be useful not only from a public health point of view, but also from an economic point of view, since it can replace the resumption of blockages that would otherwise affect the GDP,” wrote Hatsius.
– CNBC’s Michael bloom made a report.
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