How to Prevent a Coronavirus Depression by
Paul Romer and Alan M. Garber
Romer and Garber note:
“In a market economy, firms are good at meeting stable
demand, but they do not stockpile in anticipation of a crisis. Now that we face
a shortage, we would like firms to double or quadruple their daily output of
protective equipment. But they would be reluctant to buy machinery that will be
idle when the shortage is eliminated and demand returns to normal. Philanthropy
like that provided by the Gates Foundation can help, but only the federal
government can orchestrate and finance the dramatic industrial mobilization
that we need in the face of this crisis.
In the long run, we are likely to have better options
— a vaccine perhaps, or effective drug treatments.
But we cannot afford to wait and hope. John Maynard
Keynes famously quipped that in the long run, we are all dead. If we keep up
our current strategy of suppression based on indiscriminate social distance for
12 to 18 months, most of us will still be alive. It is our economy that will be
dead”.
Beating COVID-19 and the Economic Pandemic
This Time Truly Is Different
https://www.project-syndicate.org/commentary/covid19-crisis-has-no-economic-precedent-by-carmen-reinhart-2020-03Top Economists See Some Echoes of Depression in U.S. Sudden Stop. Key is length of contagion and the economic policy response
https://www.bloomberg.com/news/articles/2020-03-22/top-economists-see-some-echoes-of-depression-in-u-s-sudden-stop
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