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. 

Leonard Goebel, Thomas Mayrhofer, Hendrik Schmitz, 12 December 2020

Many people tend to avoid the worst outcome when making decisions – a concept known as ‘prudence’. This column presents results from an experimental setting which relate risk attitudes to willingness to get vaccinated. It shows that more prudent individuals are less likely to take a vaccine. Moreover, this effect is stronger in risk groups, such as older participants and those with pre-existing illnesses. The findings could help politicians convince people to get vaccinated against Covid-19, by appealing not only to risk assessments but also to social responsibility.

Anna McDougall, George Orlov, Douglas McKee, 10 December 2020

Many higher learning institutions have shifted to remote learning in response to the COVID-19 pandemic. Although research has found that online classes can be just as effective as in-person classes, there is evidence that suggests disadvantaged students may perform relatively worse. This column compares student performance on a set of standard assessments at four PhD-granting institutions in the US before and after the switch to online classes. It finds little evidence that disadvantaged groups were further disadvantaged by the pandemic in their college learning. Instructor experience with online teaching and the use of active-learning techniques have a positive effect on student outcomes.

Matthew Spiegel, Heather E. Tookes, 07 December 2020

As the COVID-19 pandemic continues worldwide, policymakers are still grappling with the question of which non-pharmaceutical policy interventions are effective. In the US, state and county policies varied widely, as did the growth in fatalities due to COVID-19. This column examines US business policies to help shed light on which policies save more lives. Stay-at-home orders, mandatory mask requirements, beach and park closures, restaurant closures, and high-risk (Level 2) business closures most consistently predict lower fatality growth four to six weeks ahead. Closures of low- and medium-risk businesses do not appear effective and, despite their costs, may even be counterproductive.

Francesca Caselli, Francesco Grigoli, Weicheng Lian, Damiano Sandri, 16 November 2020

Non-pharmaceutical interventions remain key to slow the spread of the COVID-19 pandemic. This column examines the impact of lockdowns on mobility in a large number of countries during the first seven months of the pandemic. Both lockdowns and voluntary social distancing helped contain the first wave of COVID-19. In particular, stringent and rapidly adopted lockdowns significantly slowed the spread of the virus. Despite their short-term economic costs, early and tight lockdowns may pave the way to a faster recovery.

Margareta Drzeniek, Sheana Tambourgi, Ilaria Marchese, 12 November 2020

COVID-19 is accelerating structural transformations, notably towards more digitalised and more automated economies. This column presents a COVID-19 economic recovery index which considers the extent to which a country is exposed to major health effects from COVID-19, the degree to which a country’s economy will be affected by the crisis, and a country’s capacity to recover and rebuild to pre-COVID-19 levels. To guide their economies out of this crisis and to ready them for the coming transformation, governments need to restore trade flows, manage the risks of slowing global economic convergence, and actively prepare for accelerating economic transformation.

Roberto De Santis, Wouter Van der Veken, 11 November 2020

Understanding the economic impacts of a global pandemic is a key challenge for the economics profession. This column analyses the 1918-1920 Spanish flu to gain insights about the expected output losses and downside risks from such an event. It estimates an average output drop of 7% across the globe over the years 1918-1920, increased macroeconomic risks, and an increase in income inequality across countries. The expected real income loss is nearly twice as large for lower-income countries. As for the US, the estimated output fall due to the Spanish flu is small, but the macroeconomic risks are not negligible.

Vincenzo Galasso, Vincent Pons, Paola Profeta, 07 November 2020

The efficacy of government lockdown measures to contain COVID-19 hinges on people’s willingness to comply. It is critical to identify and convince those who are the least compliant. This column surveyed over 21,000 respondents in eight OECD countries, in March and April 2020, on beliefs about COVID-19 and containment measures and their level of compliance with the measures. Men and women differ strikingly in both beliefs and behaviours, with women are more likely to take the pandemic seriously and more compliant than men. The findings suggest that public health communication should target men and women differently.

David Johnston, Claryn Kung, Michael A Shields, 05 November 2020

Building individual resilience is an important policy priority in many countries. This involves maintaining healthy levels of psychological and physical functioning in the presence of adverse events. This column documents the dramatic impact of the Covid-19 crisis on psychological distress in the UK. It shows neither financial resources nor religiosity, neighbourhood social capital, or cognitive skills were associated with a more resilient response to the crisis. In contrast, it finds that the non-cognitive skill ‘self-efficacy’ has been a strong predictor of resilience during the pandemic.

Joshua Aizenman, Hiro Ito, 27 October 2020

The economic policies of the US in the post-COVID era will have important implications for the global economy. This column outlines two different exit strategies for the US from the COVID-related debt-overhang and analyses their implications for emerging markets and global stability. A strategy of continuing loose fiscal policies and accommodating monetary policies may spur short-term growth but would also increase the risks a deeper crisis in the future. Alternatively, the US could adopt a two-pronged approach of shifting fiscal priorities towards expenses with high social payoffs and then promoting fiscal adjustments aimed at a primary surplus and debt resilience. The post-WWII success story illustrates the feasibility of, and gains from, a two-pronged fiscal strategy.

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