I will be posting a reading schedule on Canvas. You will find the readings here, if you did not already download the chapters.
Monthly Archives: March 2020
How do we get through this economically?
Take a look at the lower part of this list of occupations by hourly wage. You will notice that a lot of the lower wage jobs are also those that are not in demand right now. These workers are likely to have the lowest savings, and generally less worker benefits like paid time off and a salary contract:
What is the best way to get those folks through the quarantine financially whole?
Right now we are balancing several priorities:
1. Slow Covid19
2. Minimize disruption to economic activity
3. Minimize economic damage to individual businesses and their workers who are unavoidable casualties of the quarantine. (Airlines, hotels, theaters, MODEL UN CONFERNECES! etc. )
4. Prepare for a “V-shaped” recovery.
If you want to think about it in graphic terms, right now aggregate demand has shifted left, hard. Nothing fundamental about our Long Run Aggregate Supply has changed. If we can minimize damages to the supply side, can we boost demand after things return to more normal activity? We were at AD3, with very low unemployment and high output. Now we are at AD1. What can be done to get us to AD2, then hopefully back to AD3?
What should we be wary of in terms of losing productive capacity while everything is semi-dormant? Do we bail out airlines? Do we give hourly workers, or food service workers, a supplemental paycheck at a federal level?
One challenge is that we have already employed a lot of the monetary tools that would usually be called for in a recession. Fiscally, we’re already running a large deficit, with a high debt to GDP ration.
Coronavirus articles
This may be the key understanding that may help us all understand why closing and cancelling before there’s confirmed cases is really worth it. It’s not just the number of cases, but our medical system’s ability to handle them:
Twitter of a very informative doctor: https://twitter.com/DrMichelleLin
NPR story on when schools should close:
https://www.npr.org/2020/03/11/814438424/when-should-schools-close-for-coronavirus
From the article:
“If you wait for the case to occur [in your school], you still have wound up closing the school, but now you’ve missed the opportunity to have the real benefit that would have accrued had you closed the school earlier,” says Yale University sociologist and physician Nicholas Christakis.
“It’s sort of closing the barn door after the cow is gone.”
dennismclain 