Three HEEP Faculty Fellows were quoted in a recent article written by Jon Hilsenrath and Stephanie Armour for the Wall Street Journal. The article, titled "As Economic Toll Mounts, Nation Ponders Trade-Offs" was released on Monday, March 23rd and features Harvard Professors Lawrence Summers, James Hammitt, and Joseph Aldy. The three HEEP Faculty Fellows provide insight into how the U.S. is managing the response to the COVID-19 outbreak and how it is affecting the economy.
"Lawrence Summers, a Harvard economics professor and former U.S. Treasury Secretary, said much of this economic toll would be hitting the U.S. even without government-mandated restrictions. Fears of contagion would likely be driving people on their own to avoid restaurants, airplanes and ballparks, even without government mandates, such as mandates in New York and California that people stay home.
“A large part of the dislocation is caused by the coronavirus and not by the policy response caused by the coronavirus,” Mr. Summers said. “I don’t think we need to turn this into a dollars-versus-lives thing at this stage.” He said the best choice was likely addressing the health risk, treating the economic damage, and then working to prevent future pandemics."
The situation is being compared with the global climate crisis, albeit on an accelerated scale.
"The critical difference between the climate debate and coronavirus is that the climate debate has already played out glacially for years. The consequences of the problem and policy responses are predicted to occur gradually in coming decades. With the coronavirus, these trade-offs are being made in just a few weeks, with the human loss and economic toll happening all at once.
“It is the same thing with climate change, but on a totally different time scale,” said James Hammitt, a professor of economics and decision-making at Harvard’s T.H. Chan School of Public Health."
Aldy weighed in on the uncertainty of the pandemic and how difficult it is to measure the costs that social distancing will have on the overall economy and indeed the question of "how does one measure the cost of a human life?"
"In this case, the unknowns are especially large, notes Joseph Aldy, a Harvard professor and former adviser to President Barack Obama. The mortality rate of the virus itself is unknown. Because testing has been especially sparse in the U.S., nobody knows how widespread it is in the population, or how aggressively it transfers from one person to another.
“It is hard to even assess probabilities,” he said."
Concluding the article, Professor Hammitt notes that "The U.S. should be willing to bear substantial costs to overcome this virus, because it is something that can cascade out of control."