CREDO economists, along with other scholars, discussed and debated the best policies in light of the COVID-19 pandemic in two separate panels. On May 5, 2020, amidst lockdowns in many areas Jesus Fernandez-Villaverde (University of Pennsylvania) and Casey Mulligan (University of Chicago) discussed the economic and social costs and consequences of the lockdown. On June 2, 2020, as the lockdowns were easing, Kirk Doran (University of Notre Dame), Mary Hirschfeld (Villanova University), and Fr. Paul McNelis, S.J. (Fordham University) joined Daniel Sulmasy, a medical doctor and medical ethicist at Georgetown University came together to discuss lessons after the lockdown.
Fernandez-Villaverde emphasized that there is a great deal of uncertainty in terms of the dynamics and risks of the disease because models of the epidemiology are under identified, and the situation varies across countries. He also argued that “in the next phase we want to move to targeting certain social groups,” because the health risks are largest for those older 60 while the economic and educational risks impact the young. He explained that his opinions are influenced by the “millions and millions of children that are not being educated and the millions and millions of young people that are not getting into the job market.”
Mulligan argued against the government lockdown, presenting his calculations that the total economic costs of the lockdown including market, nonmarket activity, and lost human capital accumulation were roughly $28 billion a day. He emphasized that these economic losses were greater than those of lives lost by the pandemic, when the latter is evaluated using the statistical value of a life, a monetary valuation based on people’s willingness to pay for a reduction in mortality risks. He also addressed distributional issues cautioning that one-size-fits-all regulatory policy usually are made “with the interests and lifestyles of the upper class in mind”.
Roughly a month later, as lockdowns were being lifted, the second conversation shifted more toward the future prognosis for the economy and future policies amidst a pandemic that consider a broader sense of the common good.
In response to the question of whether we had reached a new phase, the panelists agreed that the impacts would be prolonged. Conjecturing that initially people were responding to uncertainty rather than assessible risk, and although much of the uncertainty has subsided, McNelis predicted that even though much uncertainty had subsided, employment would follow a longer term hysteresis as employers moved toward labor-saving technology. Doran also argued that the epidemic would continue to have “dramatic effects” on the economy even after lockdowns are lifted. Social distancing behavior lead to unemployment, he explained, and “a lot of that social distance is very voluntary and not the effect of the government lockdown.” Hirschfeld described the economy as a complex network of relationships, in which many relationships have been severed and are not easily rebuilt. Sulmasy emphasized that the risks of COVID were and remain quite strong, relative to other communicable diseases in past experience.
Considering the distributional impacts moving forward, McNeil echoed the generational concerns of Fernandez-Villaverde. Using an analogy with the GI Bill in the United States after World War II, he declared, “The people who have been bearing the cost of COVID, the under-40 generation who have been hit very hard, should be given some very special benefits”, but he acknowledged that redistributing from old to young is politically difficult.
More generally going forward, Hirschfeld claimed that Catholic social thought needs a “thicker” conception of the common good. In a liberal society that lacks consensus, she explained, “we tend to emphasize…instrumental goods: wealth on the one hand and health on the other.” As an example of an ignored aspect, she pointed to the problem of old people being isolated and dying alone during the lockdown.
Doran also mentioned moving past the health and wealth dichotomy arguing that even the two are intimately related. “We’re trying to understand a very subtle set of responses that are rippling through our economy and our emotional lives, ” he explained.
In addressing the complexity of the problem, Sulmasy gave the example of the disease being spread from an Italian cruise ship to Cozumel locals and then eventually to Mayan villages when tourist workers were laid off as the tourist industry slowed. “No one could have anticipated that… but we need to learn from it to face the future of this crisis and other crises in the future.”
Full recordings of the panels are available at:
