Olympic cancellation wouldn’t be an economic shock

With the number of confirmed infections of the new coronavirus rising in Japan, cancellation or postponement of this year’s Tokyo Olympics is becoming a possibility worth considering. The key point in terms of the economic impact of such a move is that most of the spending for the Olympics has already happened. Spending during the Games themselves is small, perhaps just 0.2% of GDP, and much of this is diverted from spending in other areas of tourism and recreation.