Economists’ view of the pandemic. Part 1

An economists’ view of the pandemic.

part 1

We have analyzed speeches and reports by leading economists and scholars from around the world, and have gathered you the main thing.

A virus is a perfect mathematical model, meaning it can be calculated and predicted. But the problem is that we are always “late” by at least three weeks. People who are dying today were infected three weeks ago.

The situation we see now is the result of actions and decisions made three weeks ago. This is important – we will see the result of our actions today only in three weeks! Simple calculation, math – this is exactly how COVID-19 behaves. By observing the quarantine now, we are in the experimental stage, and the result of it will be seen only in 3-5 weeks.

The main mistake is that everyone makes decisions based on what they have today or had yesterday, while you should make decisions based on what you had three weeks ago.

Only now, with the experience of different countries, economists can say what measures have produced what results. It was simply impossible to predict this before – there was no data.

Those who do not understand this say that the quarantine is not working, and the situation is only getting worse every day. But, I repeat, we are seeing today what happened three weeks ago. And we will not see the result of our quarantine today until three weeks from now.

China’s experience helped a lot in this situation, but not many people listened to it. Frankly speaking, China “gave” Europe these very three weeks, and the rest of the world a month and a half. Asian countries that are next to China used this gift faithfully. Most likely due to the fact that they already had experience in fighting local epidemics.

The countries of Europe and America used this gift of time incorrectly, with a significant lag. Of course, such strict regulation is impossible in these countries, but the only thing that could have been done was to react a little earlier. If back in January everyone had put on masks, observed disinfection measures, tested everyone with the slightest suspicion of the virus, economists are sure that it would have been quite possible to avoid a strict quarantine, and enterprises and institutions would not have closed down.

As for those countries that have not yet imposed a strict quarantine, they will see the result in a month, but then it will be too late.

A little math. A doubling of infections occurs on average in 7 days. Thus, each country could calculate the approximate number of cases starting from the first case detected. Roughly speaking, starting from 100 detected cases to the infection of 1 million people will take about 3 months, and the average population of a country is much larger than 1 million. Therefore, in order for the virus to disappear, everyone needs to develop immunity to it. At these calculations, that’s 5-6 months.

Between 1-3% of the population will die, meaning we will know these people, everyone will be surrounded by someone they know who has gotten sick or even died.

But no one knows anything for sure, we may be wrong about the rate of development, economists make allowances for various conditions and, as in any mathematical model, they allow for possible uncertainty.

What is clear is that this is a long-term problem that can only be dealt with in stages. And the first is a strict quarantine to reduce the rate of spread. The duration of the stage is 1-2 months. Then, when positive dynamics and reduction of cases is revealed, the measures will be gradually weakened.

Here it is important not to make a mistake with the relaxation, otherwise you cannot avoid the second wave. That is why it is so often said about consciousness and attentiveness of each person.

The virus will pass through the entire population anyway. For many people it will be asymptomatic, most have their own high immune barrier. And for some it will require serious medical intervention, equipment and ventilation. It is because of the lack of medical system preparedness in many countries for such a large burden that they are forced to impose a strict quarantine.

The quarantine task is complicated by the fact that people make individually optimal decisions for themselves, that is, they do what is beneficial for them. But this does not correspond to what is necessary for society as a whole.

If your chances of not getting sick, or even getting sick but recovering, are high, you have a high immunity and you are not in a risk group, then the virus itself may not be dangerous for you. You can continue to live a full life. But, you definitely pose a huge danger to other people with lower immunity and worsen the overall situation. This is the case when single facts of quarantine compliance are ineffective, here only the fulfillment of the prescribed rules by the absolute majority of the population will work. The main task of 80% of the population is simply to comply with the quarantine.