The latest Grumpy podcast on all things Covid still.
Rue Britannia, the latest Good Fellows podcast.
The economics of lockdowns, CATO webinar with Ryan Bourne, Anna Scherbina and Emil Verner. Anna summarizes her modeling work on length of the recession, Emil on lessons from 1918. Only at CATO do we get good questions about economic and civil liberties endangered by lockdowns.
https://www.youtube.com/watch?v=gxAaO2rsdIs
ReplyDeleteIn goodfellows you talked about the weakness of models.
You should watch this youtube video by mathematician 3blue1brown
So, I watched the Webinar. I think it's interesting to note that Dr. Cochrane's solution to reopening the economy does depend on a combination of technology and the smart application of it. In this sense, yes, technology does help, because it provides data, which then leads to formulating courses of action that are sane versus insane - the insane option cultivating an environment of moral hazard (someone else gets to hold the bag - who wants to hold that bag, hmm? No one, of course).
ReplyDeleteSo, yes, smart testing, smart use (and knowledge) of how probabilities work, and formulating decision matrices (Nash eq. perhaps?) that have payoffs (C/B) built in.
Tradeoffs have probabilities attached to them, and very few are exactly 1 or 0. Getting that R (rate of transmission) below 1 is a good goal, and I believe it can be cheaper than Fiscal and Monetary Bazookas that could end up blowing up in our faces. However, letting businesses fail, letting all that capital go to waste because we were caught flat-footed isn't a good idea - have to heal the problems and reformulate preferences towards stability versus unbridled risk taking.
This may lead to adjustments in consumer and producer behavior, a.k.a., a shift in preferences. What will be the new normal? Will the original normal return? May not be a bad idea to let the old way die. Consider it a learning experience.
Always enjoy this stuff, Dr. Cochrane.
Best,
M