  In order to prevent the spread of COVID-19, governments have often required
regional or national lockdowns, which have caused extensive economic stagnation
over broad areas as the shock of the lockdowns has diffused to other regions
through supply chains. Using supply-chain data for 1.6 million firms in Japan,
this study examines how governments can mitigate these economic losses when
they are obliged to implement lockdowns. Through tests of all combinations of
two-region lockdowns, we find that coordinated, i.e., simultaneous, lockdowns
yield smaller GDP losses than uncoordinated lockdowns. Furthermore, we test
practical scenarios in which Japan's 47 regions impose lockdowns over three
months and find that GDP losses are lower if nationwide lockdowns are
coordinated than if they are uncoordinated.
