Header Ads

Breaking News

Economists told us what a pandemic could do. Who listened? | Torsten Bell | Opinion


Just a few months ago, no one had heard of coronavirus. Today, it’s profoundly changing how millions of people live. Policymakers have been playing catchup, not least on how to respond to the economic crisis. But experts (the ones Michael Gove said we’d had enough of) had pointed the way to what is now taking place. A World Bank paper on avian flus forecast that a severe outbreak would lead to a near 5% fall in global GDP, and double that in Europe. That work, done in 2006, seems much closer to where we are headed than almost all the forecasts done in 2020.

A US congressional budget office paper from that period examines the economic impact of various sizes of pandemic, from a repeat of the 1918-19 Spanish flu to the less lethal Hong Kong flu in the 1960s. It is particularly prescient.

First, it notes that modern flus will spread faster and cross national borders. Tick.

On short-term economic effects, it points to a surge in demand for hospital equipment, capacity pressures on staff, a collapse of air travel and a period of people quarantining themselves, thus driving down retail sales. Schools would then close, causing widespread workplace absence.

So far, so familiar. But what about the long-term? The good news is that growth picks up pretty quickly post pandemic – our job is to get there.

The conclusion? Schools might be closed, but history lessons should continue.

Source link

No comments