JPM Explains Why A Return To Lockdowns Isn’t A Smart Strategy For Suppressing COVID-19’s “Second Wave”

A team of macro analysts from JP Morgan’s sell-side research desk published a lengthy paper aggregating all of their COVID-19-related findings. And while perusing the note, one particular finding caught our eye. In one section of the note, the team addressed a critical question for epidemiologists (and investors): Will the amount of time required to reach “peak” infection rates vary between successive “waves” of the virus? And if so, how might this inform the global policy response?

Succeeding in compressing the “half life” of the wave should be the central focus of policy makers, the analysts argued. And while globally, the policy response in country after country has favored lockdowns, Melbourne is showing right now that, especially when case numbers are small relative to the overall population, lockdowns might not make sense as the most effective way to contain the virus.

As the infection curve starts to resurge in many countries, signaling the next wave, we examine whether the time to arrive at the peak is similar in both the first and second waves. Conceptually, we develop a hypothesis on shorter potential lifespan for the infection curve as the curve moves into the next waves.

In our view, the concept of decay in ‘half-life’, i.e. the time required for a quantity to reduce to half, could be applicable to picturing the next waves.

We think (1) better secondary infection rate control, (2) large mobility tracing and more voluntary testing; and, (3) shorter recovery periods could drive a shorter curve peak.

It is not necessarily so that if more people are infected, a larger part of society would have antibodies and that this would flatten the curve. We note that, in most countries – both developed and developing – the size of infection is only 0.2-0.5% of the total population.

Even if we were to assume about 5x higher unreported infection cases, this is still relatively small. Also, “ring vaccination” is not a strategy yet, as so far we do not have a vaccine widely available for the public.

Over the coming 6-12 months, JPM analysts concluded, it’s likely that a number of factors resulting from lessons learned during the first wave will commingle to help shorten the trough-to-peak dynamic in the ensuing waves.


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