#COVID19Chronicles-170: September 29, 2020-Health vs economics?

Since the onset of the pandemic in the spring, many have focused on and argued about trade-offs between health and the economy. It’s not really an either or matter, as it needs to focus on what elements of the economy may be deemed important and what aspect of health provision is important. So, to me, at least, it’s not about an economy working fully as it did before and health focused just on COVID-19 issues. In a simplified example, we could say that policy makers would try to preserve the activities of the main economic drivers in terms of income and jobs, with an eye on how they could proceed while not worsening dramatically the chances of keeping good control of the pandemic. The health focus could be how to ensure that resources directed at addressing COVID-19 (personnel, facilities, tests, and medicines, say) were given priority, subject to not playing key elements of routine and emergency health care in jeopardy.

That said, an interesting study was conducted by MIT in the summer to look at this trade-off. It found: ‘Vital forms of commerce that are relatively uncrowded fare the best in the study; less significant types of businesses that generate crowds perform worse. The results can help inform the policy decisions of government officials during the ongoing pandemic. As it happens, banks perform the best in the study, being economically significant and relatively uncrowded.’ So, it pointed to categories of economic activity there in a sense more COVID-friendly. It then allows some assessment of what policy makers sought to protect, so bars/restaurants might have found favour, but they serve some important social support functions in allowing people to preserve certain senses of normality. Likewise, many would understand schools being less favoured because of overcrowding despite therisks of losing out on educational development.

In Jamaica, discussion about this trade-off has centered around closing/opening our borders, mindful of the significance of tourism; curfews, when and how long; restrictions on movement, mindful that compelling certain high risk groups to remain at home might be good from a health perspective, but have harmful effects on ability to work and earn; and policies to encourage working from home, thinking that economic activity without the need for commuting, would yield health benefits for less economic loss.

The discussions roll on. One clear decision in recent weeks, has been that another lock down is not part of government thinking; the economic costs are deemed too great.

Some business people have since been arguing for short curfew hours.

However, I asked if the curfew were only 10pm-5am what is the health/limiting virus spread benefit we’re supposed to be getting from it being that short?

Some interesting interactive charts about national responses to the pandemic also give insight into how countries have prioritized activities and policies (eg income support). So, the charts below show how the UK and Jamaica had different trends in visiting various places. We can see the sharp decline in the period from around mid-March and lock down because the norm in many countries. Then, from April, we see activities resuming, and in many instances, these are still far below pre-pandemic levels.

Author: Dennis G Jones (aka 'The Grasshopper')

Retired International Monetary Fund economist. My blog is for organizing my ideas and thoughts about a range of topics. I was born in Jamaica, but spent 30 years being educated, living, and working in the UK. I lived in the USA for two decades, and worked and travelled abroad, extensively, throughout my careers and for pleasure. My views have a wide international perspective. Father of 3 girls. Also, married to an economist. :)