From the Executive Summary: "We are currently fighting a war against the COVID-19 [coronavirus disease 2019] virus. The war presents an obvious and massive tradeoff between 'guns' - activities whose primary purpose is war production - and 'butter,' which refers to the normal activities of households and businesses. Without any improvement in our techniques for fighting the war, the sacrifices by households and businesses will be staggering and historically unprecedented. This document enumerates and quantifies the sacrifices, showing why 'negative 60 percent' is an optimistic projection for the annualized growth rate of U.S. GDP [gross domestic product] in 2020 Q2 [quarter 2] if the nonessential businesses were not allowed to operate during that quarter. The lost surplus from market activity, while massive, nonetheless understates the true costs of the sacrifices that households and businesses are making, which I estimate to total almost $15,000 per household per quarter before counting any health costs or monetizing any intrinsic costs of forgone civil liberties. This is why better techniques for fighting the war are incredibly valuable. Medical innovation can reduce the intensity and duration of the war, yet Federal policy continues to be a major barrier to that innovation."
Working Paper No. 2020-48
Becker Friedman Institute
Becker Friedman Institute: https://bfi.uchicago.edu/