Congestion delay index is an appropriate economic proxy variable:
1) we must find the proxy variable of GDP. We have difficulties in transforming nominal value into real value and real value into year-on-year growth rate;
2) in terms of calculating the impact of the epidemic on the economy, the externalities of affected cities exist. There will be learning effects of epidemic prevention policies among cities and passive injuries among cities, which will make it impossible for us to separate the impact of calculation on GDP.
Cities seriously affected by the epidemic will be divided into four stages: autonomous epidemic prevention, policy epidemic prevention, policy liberalization and vitality restoration:
1) the autonomous epidemic prevention association upgraded earlier than the urban control, and most of the people have a keen sense of smell. In many cities, the people had been cautious before the control or even the emergence of the epidemic;
2) after the epidemic situation is cleared, the epidemic prevention policy will be released, and after the policy is released, the people will still experience a stage of confidence recovery and the traffic vitality will come back.
People's sense of smell is important:
1) autonomous policies determine whether the disease will stabilize, and urban control will determine whether the disease can be cleared;
2) in most cases, once the autonomous epidemic prevention starts, the epidemic situation will peak and fall back within about one month (this time is very accurate);
3) even for Omicron, which is more infectious, trading time for space is still effective, but we need to wait longer (about 2 months).
Space is not a very important variable in epidemic prevention. Our epidemic prevention measures are improving. Even in case of a major epidemic, we don't have to make the city as empty as before:
1) the bottom of control measures is indeed rising, which is related to the accuracy of epidemic prevention measures and the decline of people's fear;
2) the experience of confronting Omicron shows that as long as it is accurate, the strength of Shanghai is enough, and the key is time.
According to the past law of time, as far as the cities in the hardest hit areas are concerned, the vitality of Jilin and Changchun will recover in two months, but Shanghai may have to wait until July.
However, epidemic prevention is also trying and making mistakes. Shanghai is trying to trade space for time, although this space is extremely limited:
1) from Shanghai's more refined epidemic prevention attempts before the second inflection point of the epidemic, economic growth can no longer be ignored;
2) the clearing policy itself has meant the sunk cost of virus epidemic prevention (the more liberalized it is in a short time, the greater the economic harm will be caused by the long-term spread of the disease). However, when the cost is too heavy in a short time, we do not have to discount the cost to the present.
Under the assumption that the epidemic is not out of control in other regions, our inference of the impact of the epidemic can be divided into optimistic and pessimistic situations:
1) the optimistic situation is: cities with no serious epidemic will no longer be full of grass and trees, and their work focus will shift to economic growth, then the GDP of Q2 may be affected by 3.3%;
2) the pessimistic situation is that many cities are still over defensive, and the subsequent slowdown of GDP pressure can only rely on the clearing of Jilin and Changchun, which has an impact on Q2 economic growth of about 4.7%.
Risk tip: monetary policy exceeded expectations and economic recovery exceeded expectations.
