Aibu to want to hear more from the economists

[TheoneandObi]

I'd really really like to see and hear more from economists who must be modelling away as frantically as the epidemiologists. What are the relative pros and cons to a circuit break as opposed to long drawn out and sporadic semi lockdowns? That kind of thing . Have I missed the big economic brains on this?

Yes, absolutely.

We're hearing so much from Matt and The Science but virtually nothing from Rishi and The Money. As The Money pays for the NHS, state schools and all public services, we need to be sure we arent going to be bankrupt at the end of this.

There is so much financial and economic data being gathered in the background, specifically relating to this pandemic, it's beyond time we know what it looks like.

I want a full and frank opinion from Rishi Sunak and HIS people.

Yes Id like to see some modelling on this too.

I agree. Its not simply an issue of how to stop the virus. Its how to stop the virus AND not destroy the economy AND not ruin children's education AND maintain other healthcare services and so on and so on. Only ever hearing from one of the specialists makes it seem like its only the one issue that matters.

I mean I'm quite sure it's going on in Economics Depts at our universities in the same ways that the brains at Imperial and LSHTM are working on the R rate etc. It's just it's not making it to the news outlets is it?

I sent you a pm theon

We were clearly told that this would be the worst recession in Britain's history - that is absolutely ground shaking stuff - and yet it was almost immediately then swept under the carpet with COVID being the sole focus.

The worst recession in history. Think on that for a second, then consider that assessment was given on the basis of only one lockdown.

@PicsInRed what was the previous worst recession?

Bloody good point.

Agreed

I want to hear this too.

I've seen quite a lot of stuff from the Resolution Foundation www.resolutionfoundation.org/our-work/coronavirus/

[quote MillieEpple]@PicsInRed what was the previous worst recession?[/quote]
Off the top of my head, I think it was the South Sea bubble ... but don't quote me on that!

it will undoubtedly be the worst recession in living memory

I think covid-19 and Brexit will destroy the economy. It will take years if not decades to bounce back... I don't think many people are quite aware of the situation or they genuinely don't care.

I'm not an economist and I hope my prediction is way out / wrong!

i'm old to have lived through mass unemployment and i can assure you it's fucking grim. I think a lot of people simply don't know or have forgotten how terrible things get once you get to around 10% unemployment and that's where we heading (and probably more). The long term impact is frightening.

Its too scary to think about!

Economically we are doomed. Apart from all the obvious things, China will just take over international trade from the weakened Western countries.

All rational people know the key to a healthy economy is to get the virus under control.

9 months in that's just empirical fact.

I would expect economists to know that.

But when you've got a government that won't...it's bad option versus bad option isn't it?

And Brexit in 78 days

The economic modelling though is highly dependent on the epidemiological data. Economists could relatively easily do a projection showing the economic impact of a 2 week lockdown based on changes in production and consumption. However determining the counterfactual is more complex.

In order to work out the economic impact of a do nothing scenario or a continuation of current social distancing without a lockdown they would need to examine
A) projected infection rates, hospital admissions and death rates under this scenario
B) what would be the behavioural outcomes of these rising death rates e.g would people stop going out and spending money if death rates spiralled
C) What are the short term economic consequences of rising infections and death rates e.g through people being unable to work, teachers off, schools shutting
D) What are the long term economic consequences of this, for example dealing with the long term health impacts caused by covid infections

The IFS is worth following on Twitter or on their website, they've done quite a bit of work on the cost of various packages and what this means fiscally and various other accessible articles.

In fact, there are quite a few macroeconomists on twitter talking shoot coronavirus related issues.

Here is one interesting model comparing the impact of Brexit to Covid
ukandeu.ac.uk/the-uk-economy-brexit-vs-covid-19/
This model estimates that Covid-19 reduces UK GDP by 2.1%. However, Brexit reduces the present value of GDP by 3.7% under an FTA scenario and 5.7% if there is no deal. In this sense, Brexit is expected to be a substantially bigger economic shock than Covid-19.

I have an economics degree and I can’t get my brain around this at all. I’m not an economist but based on my experience I do wonder if they’re just sat scratching their heads and looking confused (of course they’re not, but this really is a bizarre set of circumstances with lots of factors which I imagine are very hard to model). From what I’ve seen, there is some confidence that the actual textbook definition of a “recession” won’t last that long.

The “worst recession” in our recent history was probably post WW1. Based on length of time and drop in GDP.

I read a quote last week which sums it up for me:

"Enjoy Covid because the future is going to be hell"