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Covid-19 Economics
Covid-19 Economics
20. Read the working paper The Impact of COVID-19 on Gender Equality by Titan M. Alon, Matthias Doepke, Jane Olmstead-Rumsey, Michèle Tertilt. What do they say about gender equality as result of the shelter-in-place, shutdowns, or lockdowns orders?
In the working paper The Impact of COVID-19 on Gender Equality, it illustrates the economic dip caused by the pandemic and the disconnection from gender equality. The impact of the global issue affected sectors with high female employment shares. In the working paper it says, closures of schools and daycare centers have massively increased child-care needs, which has a particularly large impact on working mothers. The effects of the crisis on working mothers are likely to be persistent, due to high returns to experience in the labor market.
As a result of the shelter-in-place shutdown, businesses are rapidly adopting flexible work arrangements and working fathers are now subjected to take primary responsibility for child-care, which may erode social norms that currently lead to a lopsided distribution of the division of labor in the house, work and child care.
21. Read the working paper (introduction and conclusion will suffice – the rest of the paper might be a bit too technical) Health versus Wealth: On the Distributional Effects of Controlling a Pandemic by Andrew Glover, Jonathan Heathcote, Dirk Krueger, Jose-Victor Rios-Rull. What are some of the “distributional implications” mentioned in this paper as a result of the “lock-down” policies?
As mentioned in this paper, there’s an abstract relationship between economic activity and disease progression. We learn that optimal redistribution and mitigation policies interact and reflect a compromise between the strongly diverging preferred policy paths of different subgroups of the population. These redistribution effects mean that different groups prefer very different policies. Lock-down policies were designed to reduce viral spread will naturally focus on reducing activity in sectors in which there is a social aspect to consumption and sectors that produce goods or services perceived to be luxuries.
During this breakout, some of the distributional implications included the costly reduction of the government’s desire to engage in optimal economic mitigation policies. It has also allowed the illustration of how unevenly the welfare gains and losses from economic mitigation are likely distributed across different segments of society. Those working in the partially shuttered sector are the most adversely impacted, especially when it is costly to soften the distributional consequences via public transfers.
22. Provide some estimates and evidence of how much will our economy shrink as a result of the shelter-in-place, shutdowns, or lockdowns orders. In other words, how much will GDP shrink as a result of this shutdown?
The decline in economic activity caused gross domestic product to contract at a 2.4% annualized pace, which can follow a 30.1% plunge in the next quarter due to the startling pandemic. As social distancing measures increase in a greater number of areas, financial conditions tighten even further and the negative effects on GDP growth become much much greater.
By cause of everyone staying in, human production is cut, and goods and services almost become obsolete. The extreme contraction will push the unemployment rate from current historic lows to an average 12.8%, one of the highest on record since the 1940s.
23. Can you think of any other side effects, negative consequences of this lockdown – besides the decrease in the GDP? Provide evidence for your answers.
Although GDP reduction becomes a negative consequence of this lockdown, there are other issues developing. This specific issue worries communities across the United States. The issue of unemployment and sick leave/ pay benefits are the exceptional challenges facing the world's non-essential workers. Reflecting the severity of the situation, over half of all countries surveyed (53%) were containing the spread of the coronavirus with national lock-down measures such as the closure of schools and non-essential businesses.
People often have far too little sick pay, if any at all. Wage and job guarantees are lacking. The International Labor Organization (ILO) says we could lose up to 25 million jobs worldwide and depending on the timeframe, it could be worse than that.
24. How does our society value human life? What methods do economists use to estimate the value human life? What is the statistical value of a single life in the US?
From a personal perspective, I feel as though society only values the human life of those with wealth opulence. Those with fortune disparities are bracketed and are consistently considered as last priority minorities. The idea that a life could have a monetary value isn’t an easy pill to swallow from an ethical perspective. This reasoning of weighing the value of other types of lives is liable to make, hopefully, most people uncomfortable and for example, the young versus the old is tricky, too.
Economist Spencer Banzhaf says “It’s fairly simple to value someone’s life based on how much money they make, but in addition to being baldly crude, that’s just not reflective of the way we think about people. We don’t think a retired person is worth nothing.” Economists use age-adjusted and wealth-adjusted VSL (the value of statistical life in numbers) in a recent analysis of the economic cost of social distancing and they still found that the public health response to coronavirus had “substantial economic benefits.”
25. Provide some estimates and evidence about the number of lives saved as a result of the lockdown? How can one determine how many lives will be saved?
As a result of the pandemic, there is no precise analysis or prediction that can measure the potential magnitude of COVID-19’s destruction rate, now or upcoming. The lockdown is an attempt to contain the virus and slow down the estimation of deaths. Correspondingly, the lockdown has conjointly saved a decent amount life. Estimates are only as reliable as the data inputs and the assumptions on which they are based, whether directly from the hospital or government. Uncertainty surrounding the data inputs and deviations from the assumptions could lead to inaccuracy and misleading information.
One can determine, the ability to save lives would increase if the government were to organize a national logistical operation to move ventilators between states as they are needed. The incremental benefit ranges from 1,378 to 4,960 lives saved, rising to as many as 7,858 going forward.
26. What is a paycheck protection program that was just passed in response to the COVID19 pandemic recession? What are some issues with it?
In response to COVID-19 the paycheck protection program was created to incentivize employers and employees to maintain payroll during the crisis. The SBA is providing 100 percent federally backed loans for certain payroll expenses through June 30, with up to eight weeks of forgiveness for small businesses, certain nonprofits and self-employed individuals.
In addition to the rebate available to individuals ($1,200 for single filers and $2,400 for married filers) and changes to business tax rules, the program raises a few questions to me. Is this money actually enough? Will it last if the shutdown is extended? Will individuals receive more? These are issues within itself.
27. What is US Corona Virus Stimulus package? Can you explain who gets what, and how much, according to this stimulus.
The stimulus package is a payment effort given, of economic measures put together by a government to stimulate a floundering economy. The objective of a stimulus package is to reinvigorate the economy and prevent or reverse a recession. According to the US Corona Virus Stimulus package, it commits $1,200 for single tax filers and $2,400 for joint married tax filers. Congress has already passed trillions of dollars in unprecedented legislative relief in response to the pandemic, but hopefully because of the scale of devastation, lawmakers will consider another round of aid.
28. Given your analysis above, do you believe that the policies implemented both by the Federal and State governments make sense. Why/ why not?
I believe the stimulus package was a good attempt to assist, but $1,200 is not enough. Especially for those who lost their job and family members entirely. Also its not fair to those who are unfortunate, and don't have access to pay taxes. Why is it they can't receive the stimulus ? So no, I do not think that policy made sense. You cannot value these detrimental times with a mere $1,200 per individual and single out others who have an equal right to life just like the next person.
A few policies I agreed with included, the pushing back of the federal income tax deadline, the expansion of unemployment benefits and a small number of programs created through the CARES Act for the benefit of small businesses like the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, the latter of which includes cash advances.
29. Can you come up with a different and possibly better approach for handling this pandemic? Be as precise as possible and provide data and evidence for your argument.
I’d promote agreements for international technical assistance and resource mobilization to resource-poor countries with top health authorities of disease activity. During the pandemic, I would counsel health systems to provide health-care services around the clock to all in need. I would advocate the PROPER and CORRECT communication to the masses in order to maintain and build public trust with society and in public health authorities, before during and after the pandemic. I would facilitate and encourage the operability of national pandemic plans through preparedness activities and step by step exercises. Personally, I feel as though the goal of planning and coordinating precise efforts can provide proper leadership and across all sectors. These efforts should have been thought of long before the pandemic. Efforts also including the calculated adjustment in which everyone can capture an equal opportunity no matter the wealth class or race. Equal opportunities including the acquirement of resources, ranging from equipment, to proper shelter, access to the stimulus, and even more importantly equal respect. The less fortunate are treated worse now during this pandemic than before. In regard to the reduction of disease spread, yes, I would have implemented the mask requirements, and the shutdown obligations, if it were my decision, but I would have also considered those who are subjected to not having resources and the privileges of a home. Equality would be the main objective I’d exert, from all aspects.
"WE WERE BROKEN LONG BEFORE COVID-19"
"WE WERE BROKEN LONG BEFORE COVID-19"
-Brandon F.
-Brandon F.
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