The Covid‐19 lesson from Sweden: Don't lock down

Covid‐19 triggered a wave of lockdowns across the world, contributing to a severe downturn in economic activity. Governments responded by introducing expansionary fiscal and monetary measures. We compare the health and economic outcomes in Sweden, commonly viewed as an outlier relying more on recommendations and voluntary adjustments than on strict lockdowns, with those of comparable European OECD countries. Our results suggest that the Swedish policy of advice and trust in the population to reduce social interactions voluntarily was relatively successful. Sweden combined low excess death rates with relatively small economic costs. In future pandemics, policymakers should rely on empirical evidence rather than panicking and adopting extreme measures. Even if policymakers appeared to act rapidly and decisively, the rushed implementation of strict lockdowns in 2020/21 probably did more harm than good.