Expectations, Infections, and Economic Activity

Eichenbaum, Martin; Matos, Miguel Godinho de; Lima, Francisco; Rebelo, Sérgio; Trabandt, Mathias

doi:10.3386/w27988

Cited by 29 publications

(23 citation statements)

References 16 publications

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“…The present paper also relates to an emerging empirical literature that attempts to estimate the impact of the epidemic on economic activity. In particular, it echoes the findings in Goolsbee and Syverson (2020) that economic activity during an epidemic outbreak falls irrespective of non-pharmaceutical interventions by policy-makers, and the insight in Eichenbaum et al (2020a) that the probability of dying is a key determinants of individuals’ behavioral responses.…”

Section: Introductionsupporting

confidence: 65%

The Testing Multiplier: Fear vs Containment

Furno

2020

Preprint

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This paper studies the economic effects of testing during the outbreak of a novel epidemic disease. I propose a model where testing permits isolation of the infected and provides agents with information about the prevalence and lethality of the disease. Additional testing reduces the perceived lethality of the disease, but might increase the perceived risk of infection. As a result, more testing could increase the perceived risk of dying from the disease - i.e. “stoke fear” - and cause a fall in economic activity, despite improving health outcomes. Two main insights emerge. First, increased testing is beneficial to the economy and pays for itself if performed at a sufficiently large scale, but not necessarily otherwise. Second, heterogeneous risk perceptions across age-groups can have important aggregate consequences. For a SARS-CoV-2 calibration of the model, heterogeneous risk perceptions across young and old individuals mitigate GDP losses by 50% and reduce the death toll by 30% relative to a scenario in which all individuals have the same perceptions of risk.

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Section: Introductionsupporting

confidence: 65%

The Testing Multiplier: Fear vs Containment

Furno

2020

Preprint

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“…In other words, the lockdowns have not worked as intended. Eichenbaum, de Matos, et al (2020) showed that elderly people in particular are more likely to reduce spending, time away from home, and the consumption of goods likely to involve high contact with other people. Hunt et al (2020) exploited the variation in stay-at-home orders across the U.S. and found that lockdowns had only modest effects on Covid-19 transmission rates.…”

Section: Voluntary Versus Mandated Lockdown Channelsmentioning

confidence: 99%

Covid-19 Lockdown Cost/Benefits: A Critical Assessment of the Literature

Allen

2021

International Journal of the Economics of Business

130

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An examination of over 100 Covid-19 studies reveals that many relied on false assumptions that over-estimated the benefits and under-estimated the costs of lockdown. The most recent research has shown that lockdowns have had, at best, a marginal effect on the number of Covid-19 deaths. Generally speaking, the ineffectiveness stemmed from individual changes in behavior: either noncompliance or behavior that mimicked lockdowns. The limited effectiveness of lockdowns explains why, after more than one year, the unconditional cumulative Covid-19 deaths per million is not negatively correlated with the stringency of lockdown across countries. Using a method proposed by Professor Bryan Caplan along with estimates of lockdown benefits based on the econometric evidence, I calculate a number of cost/benefit ratios of lockdowns in terms of life-years saved. Using a mid-point estimate for costs and benefits, the reasonable estimate for Canada is a cost/benefit ratio of 141. It is possible that lockdown will go down as one of the greatest peacetime policy failures in modern history.

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“…Risk is a difficult concept to clarify and evaluate. Many authors define, with very similar criteria, the concept of risk as a measure of the magnitude of damage concerning a situation that denotes danger [54]; as the likelihood that a worker will be injured or have an adverse effect on health after being exposed to a hazard [55]; or, as the relationship between the parameters of risk, likelihood, and consequences [56][57][58]. However, it is complex to define the magnitude of risk, both qualitatively and quantitatively [59,60].…”

Section: State-of-the-art Regarding Zero-riskmentioning

confidence: 99%

Zero-Risk Interpretation in the Level of Preventive Action Method Implementation for Health and Safety in Construction Sites

Pinos

González

Pentelhão

et al. 2021

IJERPH

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Risk assessment is a legal obligation for all companies in most countries worldwide. It aims to control the quality of working conditions and avoid externalizing the consequences of accidents and resulting costs to society. This work discusses the need for an adequate interpretation of the zero-risk concept from a technical-preventive perspective to assess occupational risks in construction sites. A critical analysis of several risk assessment methodologies was carried out, focusing on the evaluation criteria of little or no-risk situations. The verification of the results was made through a case study. The perception of health and safety risks by workers is very different from that of the evaluators. Often, when workers identify a situation as low-risk or even zero-risk, the evaluator assesses the same context as maximum risk. Given the workers’ and the evaluators’ responses, the Preventive Action Method establishes a new parameter, the Environment Congruence. This parameter is based on the perception of the preventive environment and gives more importance to the evaluators’ decision. When preventive action is optimal, the risk is low in all preventive observation settings. In conclusion, this study justifies the non-nullity of the risk and the difficulty of assessing zero-risk in construction sites. Therefore, evaluations with qualitative and quantitative non-risk approaches should be discarded.

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Expectations, Infections, and Economic Activity

Cited by 29 publications

References 16 publications

The Testing Multiplier: Fear vs Containment

The Testing Multiplier: Fear vs Containment

Covid-19 Lockdown Cost/Benefits: A Critical Assessment of the Literature

Zero-Risk Interpretation in the Level of Preventive Action Method Implementation for Health and Safety in Construction Sites

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