Nicholas Bloom, Paul Mizen, Shivani Taneja, 15 June 2021

The COVID-19 pandemic prompted a collective shift to working from home. This column argues that though the shift was surprisingly easy, returning to the office will be hard. New evidence from a survey of 2,500 employees in the UK shows a preference in favour of home working 2-3 days a week, with lingering concerns of overcrowded transport and offices. But allowing workers to choose when to work from home will leave empty offices Monday and Friday, and many tasks such as large group meetings are more effective in person than online. Hybrid working will be the solution.

Geraldine Blanchard-Rohner, Bruno Caprettini, Dominic Rohner, Hans-Joachim Voth, 01 June 2021

As COVID-19 vaccination programmes accelerate across the industrialised world, vaccination hesitancy is rapidly emerging as a key challenge. This column explores the relationship between pre-pandemic intensive care unit capacity and attitudes towards the COVID-19 vaccine in the UK. Despite widespread pre-pandemic scepticism about vaccines in general, willingness to become vaccinated against COVID-19 overall was strikingly high, even amongst those who rejected vaccines before the pandemic. The results point to a surprising synergy: where the emergency care systems of public healthcare providers were less strained during the early days of the COVID-19 epidemic, vaccination hesitancy is systematically less today. 

Floriana Borino, Eric Carlson, Valentina Rollo, Olga Solleder, 30 April 2021

The global spread of Covid-19 forced governments to impose strict containment measures, generating international supply and demand shocks. As a result, nationalistic views advocating for increased localisation of production were amplified. Using a novel dataset comprising 4,433 enterprises across 133 countries, this column shows that, despite being more strongly affected by the Covid-19 crisis, firms engaged in international trade have taken more resilient actions than firms that only operate domestically. These results underscore the importance of global connectedness and international trade for promoting resilience to economic shocks.

Kevin Daly, Rositsa D. Chankova, 15 April 2021

The economic consequences of Covid-19 are often compared to a war, prompting fears of rising inflation and high bond yields. However, historically, pandemics and wars have had diverging effects. This column uses data extending to the 1300s to compare inflation and government bond yield behaviour in the aftermath of the world’s 12 largest wars and pandemics. It shows that both inflation and bond yields typically rise in wartime but remain relatively stable during pandemics. Although every such event is unique, history suggests high inflation and bond yields are not a natural consequence of pandemics. 

Patricio Goldstein, Eduardo Levy Yeyati, Luca Sartorio, 30 March 2021

Non-pharmaceutical interventions have been key to containing the impact of the COVID-19 pandemic. This column examines whether the effectiveness of lockdowns on the virus’s spread and death toll has changed over the past year, using data from 152 countries from the onset of the pandemic through 31 December 2020. Initially, lockdowns are associated with a significant reduction in the spread of the virus and the number of related deaths, but this effect declines over time. Lockdown does not work as a continuous containment policy in the event of a protracted pandemic.

Peter A.G. van Bergeijk, 18 March 2021

The COVID-19 pandemic is the first time in history that closing entire economies has been used as a medical tool, simultaneously and worldwide. This column argues that such ‘pandonomics’ cannot be repeated during future pandemics that are sure to come – the costs are too heavy. Since lockdowns are very costly, future economic non-pharmaceutical interventions need to be designed more intelligently, helping the economy to restructure and support the transition from a basically ignorant and domestically oriented society into a pandemic-aware one.

Masayuki Morikawa, 12 March 2021

Working from home has become much more prevalent across advanced economies during the Covid-19 pandemic. This column uses survey data from Japan to explore how widely working from home has been adopted across industries and how productive employees are at home. It finds that the overall contribution of working from home to labour input is surprisingly small. Even where firms adopted the practice, many employees did not exploit it; and even those who did work from home did not necessarily do so throughout the week. The firm survey responses suggest that across industries, the average productivity of employees when working from home relative to at the workplace is 68.3%, which is similar to the findings from an employee survey. The results suggest that there is room for improvement to make working from home more feasible.

Victor Chernozhukov, Hiroyuki Kasahara, Paul Schrimpf, 08 March 2021

Policymakers must weigh up the consequences of prolonged school closures on young people against any impact of reopening them on the spread of COVID-19. This column shows that counties in the US that opened K-12 schools with in-person learning modes experienced an increase in the growth rate of COVID-19 cases by 4.7% on average and by 6.4% when mask-wearing was not mandated for staff at school. The findings suggest that local governments should promote mask-wearing requirements and other mitigation measures at schools.

Stefan Pichler, Katherine Wen, Nicolas Robert Ziebarth, 05 March 2021

By now, it should be clear that presenteeism (going into work when sick) contributes significantly to the transmission of diseases. This column summarises current evidence on sick-pay mandates in the US and the spread of flu-like illnesses and COVID-19. Over the last ten years, states that introduced sick-pay mandates saw a decrease in seasonal flu activity by up to 30% in the first years compared to states that didn’t introduce such mandates. Introducing sick-pay mandates did not result in significant employment or wages decreases. Mandating COVID-19-related emergency sick leave also significantly reduced COVID-19 infection rates in states previously without sick-pay mandates, especially affecting low-income and service-sector employees.

Dan Goldhaber, Scott A. Imberman, Katharine O. Strunk, Bryant Hopkins, Nate Brown, Erica Harbatkin, Tara Kilbride, 04 March 2021

Following the Covid-19 outbreak, in-person instruction in US schools was dramatically reduced in favour of hybrid and online teaching modes. School reopening is now a contentious issue, with the desire to limit community spread of the virus having to be weighed against the benefits to children of in-person teaching. This column uses regional data from Michigan and Washington to study the effects of different instructional modes on Covid-19 case rates. It shows that in-person teaching correlates with higher case growth in the community only when the pre-existing Covid-19 case rates are moderate or high.

George Alogoskoufis, 23 February 2021

Greece experienced a deep recession in 2020, and pandemic relief measures have led to further increases in its exorbitantly high public debt. This column outlines three potential methods for dealing with increasing debt after the crisis: (1) increases in taxation/reductions of government spending, (2) debt restructuring and (partial) debt write-offs, or (3) a policy of ‘gradual adjustment’ in which economic growth helps the debt burden shrink relative to GDP over time. The precise policy mix will involve significant coordination among euro area countries, but Greece must also implement domestic reforms to facilitate a dynamic and sustainable recovery. 

Leticia Abad, Noel Maurer, 19 February 2021

While the COVID-19 pandemic seemed to have affected the 2020 US presidential elections, it had remarkably little effect on the electoral returns. This column compares the situation to the 1918 influenza pandemic and examines whether the flu pandemic affected US congressional, gubernatorial, and presidential elections during 1918–1920. Flu deaths did have a small effect on elections – voters did indeed blame incumbent parties for bad health outcomes. However, it appears they cared about other things much more.

Alex Chernoff, Casey Warman, 02 February 2021

COVID-19 may accelerate the automation of jobs, as employers invest in technology to safeguard against pandemics. This column uses survey data from the US to show that women with medium to low levels of wages and education are at the highest risk of COVID-induced automation.

Casey Mulligan, 28 January 2021

The spread of COVID-19 in the US has prompted extraordinary steps by individuals and institutions to limit infections. Some worry that ‘the cure is worse than the disease’ and these measures may lead to an increase in deaths of despair. Using data from the US, this column estimates how many non-COVID-19 excess deaths have occurred during the pandemic. Mortality in 2020 significantly exceeds the total of official COVID-19 deaths and a normal number of deaths from other causes. Certain characteristics suggest the excess are deaths of despair. Social isolation may be part of the mechanism that turns a pandemic into a wave of deaths of despair; further studies are needed to show if that is the case and how. 

Viral Acharya, 26 January 2021

Viral Acharya talks to Tim Phillips about estimating the value of a COVID-19 cure using the behaviour of stock prices and a novel vaccine progress indicator. The value of a cure is worth between 5% and 15% of wealth and rises substantially with uncertainty surrounding the frequency and duration of the pandemic.

You can read the Covid economics Paper discussed, here: Covid Economics 61: 1–72.

Viral Acharya, Timothy Johnson, Suresh Sundaresan, Steven Zheng, 19 January 2021

Quantifying the economic damage caused by the COVID-19 pandemic and the worth of a cure can assist cost-benefit analyses of potential public-sector investment to alleviate the impact of the current pandemic. By reflecting forward-looking expectations, stock prices should indicate the economic value of progress being made towards vaccine development. This column estimates the value of a COVID-19 cure using the behaviour of stock prices and a novel vaccine progress indicator. The value of a cure is worth between 5% and 15% of wealth and rises substantially with uncertainty surrounding the frequency and duration of the pandemic. Understanding the fundamental biological and social determinants of future pandemics may be as important as resolving the immediate crisis.

Alvaro Espitia, Aaditya Mattoo, Nadia Rocha, Michele Ruta, Deborah Winkler, 18 January 2021

As COVID-19 spread across countries, many saw global value chains as transmitters of shocks. Using disaggregated export data for multiple countries, this column shows that participation in global value chains increased exporters’ vulnerability to foreign shocks, but it also reduced vulnerability to domestic shocks. Sourcing inputs from abroad is an example of beneficial diversification through trade when domestic production is disrupted. This evidence corroborates the view that nationalising value chains is not the way to improve resilience. 

Dirk Niepelt, Martín Gonzalez-Eiras, 11 January 2021

Infection externalities are a key feature of the Covid-19 pandemic, as individuals fail to account for the full consequences of their actions. This column develops a model of infection dynamics and economic choices and studies the resulting optimal policy outcomes. Under a scenario of the pandemic ending deterministically following an effective vaccination campaign, the model suggests that countries whose vaccination campaigns are proceeding quickly should impose a strict lockdown, while countries whose campaigns will not be completed within a few months should not impose a lockdown at all. In contrast, if the appearance of a cure is more ‘stochastic' – for example, if the virus mutates further or the vaccines turn out to be less effective than hoped – optimal policy calls for alternating between lockdowns and ‘inverse lockdowns’, with the latter stimulating social interaction.

Tinglong Dai, Shubhranshu Singh, 23 December 2020

The US continues to struggle with insufficient COVID-19 testing capacity. At the same time, US laboratories use ultrasensitive diagnostic criteria in their tests, leading to a large proportion of positive diagnoses associated with negligible viral loads. This column seeks to construct a theory that explains both undertesting and overdiagnosis. The theory predicts both phenomena may arise in the absence of mandatory viral load reporting. Despite the obvious clinical advantages of viral load reporting, mandating such reporting may not be optimal when considering laboratories’ capacity building decisions and potential benefits of widespread quarantining. 

Debora Revoltella, Pedro J. F. de Lima, 21 December 2020

The Covid-19 pandemic poses severe risks for Europe’s economy, but it also presents opportunities. The sharp short-term shock will be followed by large structural changes to the global economy in the long term. This column sheds light on the challenges ahead using data from the European Investment Bank Investment Survey. Large sectors of Europe’s economy, particularly SMEs, need to innovate and adopt digital technologies to avoid falling behind. Policy support needs to evolve from liquidity provision to a more targeted push for structural transformation. 

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