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The rise of Covidnomics

14 2 3
21.09.2020

ITHACA, New York – Boundaries between academic disciplines are always artificial creations intended to facilitate analysis, given our limitations. But as the economist Albert Hirschman once argued, there are times when it is incumbent on us to trespass them. The ongoing battle against COVID-19 and its economic fallout is such a time

The pandemic has cast a shadow over the global economy. So far, the two worst-performing economies in the second quarter of 2020 (April-June) were Peru and India, where GDP shrank by 30.2 percent and 23.9 percent, respectively, in year-on-year terms. These record declines were caused by the pandemic, but also by how we are dealing with it.

In Peru, for example, the crude mortality rate (CMR) — the number of COVID-19 deaths per million people — is 939. The plunge in its GDP is clearly related to this.

Several European countries with high CMRs, such as Spain (647) and the United Kingdom (613), also have reported some of the deepest economic slumps. But India’s CMR is only 60, which, though one of the highest in Asia and Africa, makes its sharp second-quarter contraction (bigger than almost any country in the world) difficult to explain — especially given that the Indian economy was among the world’s three or four fastest-growing until five years ago.

How can we understand such anomalies? To understand such matters, we need to recognize the interaction between medicine and human behavior.

Consider the conventional wisdom that COVID-19 is more likely to be transmitted in closed........

© The Japan Times


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