Robert J. Barbera, Director, Center for Financial Economics, Economics Department Fellow, Johns Hopkins Krieger School of Arts and Sciences
David W. Dowdy, Associate Professor, Department of Epidemiology, Johns Hopkins Bloomberg School of Public Health
Nicholas W. Papageorge, Broadus Mitchell Associate Professor of Economics, Johns Hopkins Krieger School of Arts and Sciences
The U.S. is now in the midst of a public health crisis, a Main Street jobs implosion, and a surge in companies on ‘risk of bankruptcy’ lists. Extreme social distancing, the single best hope for stemming the viral pandemic, is painfully also the driving force generating the sharp contraction of economic activity and, in turn, the slide for financial markets. This has elicited a facile storyline. Epidemiologists and economists, charged with attending to different goals, are now compelled to do mortal combat. We think this is flat out wrong. Any hope of constructing an intelligent plan for the U.S. populace in the months ahead will require thoughtful collaboration, not conflict, between public health and economics professionals. Just as an unchecked pandemic would be disastrous for the economy, a sharp economic downturn would be catastrophic for the public’s health. The goals of epidemiologists and economists are therefore fundamentally aligned.
At the moment, both groups are desperate for precisely the same data. Namely, how much of the U.S. population has already been infected with SARS-CoV-2, the virus that causes COVID-19, and by extension, what fraction of infections lead to serious illness, hospitalization, and death? Answering these questions will not only inform an appropriate public health and economic response, but it will also facilitate the sort of thoughtful discussion public health and economic experts must urgently have, if we are to chart a rational course out of the current crisis. We must institute a representative survey of U.S. individuals and households, to understand the scope of the infection already in place. Only with these data can we understand how often COVID-19 infection leads to more serious consequences.
We must also conduct well-designed surveys to measure how strictly social distancing is followed, under which social and economic circumstances it is not, and how such measures, enacted to different degrees in different populations, affect the spread of the illness. With this information in hand, epidemiological models of disease transmission can be combined with economic models of behavior under risk and uncertainty to make more realistic predictions of the future of the pandemic and of the economy. The two disciplines, working together and combining expertise, can then work together to hammer out an intelligent strategy for navigating the current crisis and preparing for the next pandemic (which will inevitably occur).
A reliable estimate of the fraction of the population that has been infected with COVID-19 (and thus likely to be immune), at a national, state, and local level, is the lodestone of data that will inform possible strategies for more targeted distancing, quarantining, and isolation-imposing strategies. Simultaneously, economists, in possession of a sense of COVID-19’s progression overall, and in communities, can think about more targeted mitigation approaches. Central to any such efforts must be high-quality data on the uneven burden and practice of protective measures, such as social distancing, depending on people’s economic circumstances and other household characteristics.
The COVID-19 pandemic in the U.S. has been breathtaking—with deaths in the U.S. doubling every three days in the last month. As the state and local leaders and the general public came to understand the nature of exponential growth, broad recommendations for social distancing were put in place. Similarly, as it became clear that these necessary distancing measures were derailing economic activity, the U.S. Federal Reserve, the Congress, and the White House combined to deliver unprecedented blanket economic support.
What we will soon hear, if we are lucky, is news that social distancing is flattening the curve—the first hint, most recently, is a lengthening in the doubling time for deaths from 2.5 to 3.5 days. If this early evidence of curve flattening is sustained, we will urgently need to craft both a new set of public health policies and a new set of economic and financial market supports. To repeat for emphasis, effectively delivering on these tasks requires that we broadly test and survey the U.S. population to understand both the level of infection and the effects of individual behavior in reducing infection rates. The fruits of that survey effort will be central to informing strategies that are tailored to the crisis at hand, protecting the health of those most vulnerable to the illness and the well-being of those most vulnerable to economic downturns.
In short, epidemiologists and economists, jointly pursuing the well-being of the U.S. populace, must rapidly learn to join hands in providing appropriate guidance to our nation’s leaders as to how to weather the current pandemic. What they both desperately need is data that can help them sort out the next rounds of policy in this terribly difficult time.