A new shock to the economy – Covid-19

There's no beating around the bush, we are all stunned by what has happened in a very short time: An invisible pathogen has entered every country of the world and affected normal life as we know it, caused governments to shift to a war footing, and brought economic activity to a halt (for example cruise tourism) or at least caused it to slow down abruptly (the rest of the economy).

Since this shock is unfolding at unprecedented speed, there is much uncertainty and there are many questions. This is welfare-destructive, because uncertainty produces stress for individuals and entire countries alike - indeed the world. It is also an unparalleled challenge for political systems, and medical staff and systems that will risk getting sick themselves to help patients. The first thing we need to do, it seems to me, is respect the difficult job that medical workers and politicians have...

Continue reading on: