Economics in One Virus Quotes

“Although, yes, countries that have dealt with the public health threat well have been rewarded with better economic performance relative to others, all have seen downturns relative to what might have been expected before the pandemic. And in countries with large outbreaks of the virus, the GDP cost of getting the pandemic under control can be huge in the short term.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Voters tend to reward those who react to crises by dishing out relief, in other words, but do not reward those who prevent the worst outcomes from crises by preparing.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“is baffling that such little apparent attempt was made by the federal government to learn from other countries’ experiences with similar diseases.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“This causes two types of moral hazard. Young people have an incentive to engage in insufficient precaution, with the worst costs of the virus being borne by others.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“A low-risk person deliberately trying to contract the disease would have risked spreading it to other people who would not have sought infection. If lots of people quickly changed their behavior to win their freedom, then we would have risked more transmission of the virus and possibly the eventual congestion externalities in hospitals discussed earlier too.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Now, the potential moral hazard problem here should have been obvious. An immunity passport would have been a potential pathway to an individual’s freedom. Its mere existence might have changed the balance of costs and benefits of desirable behavior for many individuals, particularly if the passport meant not having to abide by public health regulations upon receipt.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“In economic terms, moral hazard refers to instances where an individual or group has an incentive to engage in riskier behavior because they do not bear the full costs of the risk they are taking, or because others insulate them from the consequences.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“In the case of facemasks, the latest best evidence now suggests that authorities’ fears were overblown and that their reluctance to provide guidance for people to wear surgical facemasks when indoors in public cost lives. It was a potentially low-cost recommendation, in other words, that could have had large benefits if it had been implemented as guidance earlier. One economic study in Germany examined the variation in timing of towns and cities adopting mask-wearing mandates in shops and on public transport. It estimated that these policies reduced the growth of daily new cases by as much as 40 percent.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Then the price controls deter companies from meeting the new higher demand by increasing their production. If it’s not financially rewarding, then ramping up production will just not happen as often, especially if it brings extra costs, such as having to pay workers overtime or replace certain machines after running them hot.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Price controls like this, in fact, have very negative short-, medium-, and long-term consequences. In the near term they encourage buyers to overpurchase and hoard. Those fortunate enough to be in the store when shelves are replenished buy more than they would have if prices reflected the reality of the situation. Meanwhile, these just-in-case purchases worsen shortages for others, who see their demands unmet, given the gap between the amount of the product available and the amount they want to consume at the regulated price.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“The economist Russ Roberts has quoted the CEO of Flexport, a company that helped people getting access to facemasks.16 He was clear that one key reason for the shortage of masks was the fear of being accused of price gouging, saying “U.S. distributors can’t pass higher prices through to hospitals in the midst of the crisis, for fear of being accused of profiteering. Foreign governments and health care systems have been less encumbered by this, showing a willingness to pay more and pay faster to get first in line.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“But assessing correlations between a policy and some outcome may lead to faulty policy conclusions if they are interpreted as a causal relationship without thinking hard about the mechanisms or other variables that might drive the results. In the case of COVID-19, assessing lockdowns’ effectiveness by looking at crude death numbers might be misleading if lockdowns were introduced because death numbers were expected to rise, or if we ignore major changes in behavior.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“One of the reasons why a lot of the statistical claims about COVID-19 are controversial is that endogeneity problems abound. Early on in the pandemic, it was worryingly common, for example, to hear people take the numbers of deaths within some age brackets from COVID-19, divide that by the total population of the group, and then use the low number to conclude that people in that group are less likely to die from COVID-19 than from being struck by lightning, being a victim of a shark attack, or something else that seems a relatively tiny risk. The implicit mental model here is that becoming infected with COVID-19 is a matter of random chance and therefore the death rates observed so far represent an accurate representation of the risk of getting and dying from the disease. But this is obviously not true. Your chance of getting infected and dying of COVID-19 is influenced by both your behavior and policy. That there have been relatively higher infections and deaths in prisons or meatpacking plants does not necessarily tell us that prisoners or meatpacking workers have personal characteristics that make them more susceptible to the worst outcomes from the disease. It might simply be that they spend much time in a place that puts them more at risk of infection.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Economists describe the precise endogeneity problem outlined here as simultaneity. Lockdowns affect potential deaths, but potential deaths can also impact the adoption of lockdowns. There’s a two-way causation. In this particular case, then, the endogeneity problem might be a source of bias that leads to an underestimation of the effectiveness of lockdowns in reducing deaths, at least in the near-term after lockdowns are implemented.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“In the absence of a vaccine, those economists, using a fairly standard epidemiological model, estimated that public disclosure information like this not only significantly reduced death numbers in South Korea but could eliminate 73 percent of the economic costs of a full lockdown for a city like Seoul, South Korea’s capital.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“But there’s another potentially huge advantage of a well-functioning TTI regime. Tracing provides extensive information that enables us to quickly learn what sort of activities bring higher risks of virus transmission or which types of people are likely to spread the disease, as well as better knowledge on variables such as the incubation period of the virus. Via backward tracing, we can identify the sources and timing of local flare-ups, such as certain bars, public spaces, activities, or indeed superspreaders and their characteristics.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“But it is also likely that an on-off suppression policy of short lockdowns is likely to create a lot more uncertainty and economic inefficiency than one initial longer lockdown that gets the virus down to very low levels, thus enabling the introduction of a robust test-and-trace system.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Several other studies back this up. One exploited the variation in the timing of local shelter-in-place orders in Texas to show that those counties that adopted orders sooner saw slower case growth.17 Another paper that modeled Sweden as if it had undertaken a lockdown similarly found that the number of deaths would have been a third lower during the lockdown period had Sweden adopted that approach.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“The worst type of research on this will tend to produce a monocausal explanation—it will assume that everything that happens in a given period is due to one factor. Lockdown skeptics sometimes have the tendency to ascribe the whole economic downturn through this pandemic to government policies, for example, ignoring that the virus clearly disrupted much private economic activity anyway. Even at the time of writing in December 2020, those most critical of how state governments reacted to the pandemic continue to talk of “lockdown policies” as shorthand for any public health interventions introduced since February 2020, even though a lot of the initial restrictions I describe as lockdown in this chapter have since been lifted in most places, either partially or fully.4 So defining what lockdowns are and what they are not is critical.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“in policy there are no solutions, only tradeoffs.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Data from Citymapper shows mobility in the Swedish capital of Stockholm had fallen by 70 percent by the start of May compared to normal.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Economists William Evans and Christopher Cronin, for example, examining footfall across industries from cell phone data, conclude that “between 74 and 83 percent” of the decline in attendance at retail outlets, entertainment venues, hotels, restaurants, and service businesses was due to “non-regulatory responses by individuals and businesses”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“So, the primary externalities with this virus are the passing on of the disease to third parties, the potential congestion of large numbers of cases in hospitals, or the knocking out of essential industries through a major spike in infections.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“The fact so many still thought, months into a pandemic, that they were only risking their own health, and not that of their families who often chose not to attend, is perhaps the clearest evidence we’ll get that the externality problem is real: people often don’t sufficiently consider the costs or risks they impose on others, especially given some of the indirect externalities we’ve outlined.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

“Wolfers puts it this way: let’s suppose that social distancing overall works to save hundreds of thousands of lives. If the pharmaceutical sector had developed a pill that had the same impact as social distancing in terms of saving lives, people would have probably been willing to pay a lot for it. This would show up as a big gain in GDP. But social distancing, as a nonmarket activity, does not show up in GDP, despite similar benefits. Even if not everyone were willing to pay for it, the GDP gains of the social distancing pill would at least somewhat have offset GDP losses elsewhere.”
― Ryan A. Bourne, Economics in One Virus: An Introduction to Economic Reasoning through COVID-19