How has COVID-19 Changed the Political Economy?
New AAEA member research released in AEPP
There has been a perception of a tradeoff between public health and economic prosperity when it comes to combating the pandemic. New research shows that there is no such tradeoff across countries. Instead, urgency and decisiveness reaped double dividends in terms of both public health and economic activity.
In the new article “The Political Economy of COVID-19” released in the Applied Economic Perspectives & Policy, David Zilberman, Scott Kaplan and Jacob Lefler from the University of California, Berkeley use a political economic lens to analyze the joint economic and mortality impacts of social distancing and other public health policies. In particular, they study how policy choices are affected by political economic considerations and whether or not these policies were justified when considering both monetary and health impacts.
The authors say, “First, social distancing policies were justified on both economic and public health grounds given their clear impact in reducing mortality risk and allowing individuals to begin reengaging in activities that were on once prevented by COVID-19 concerns. Specifically, countries that responded earlier and more aggressively to the pandemic suffered fewer deaths and lower economic costs. That is, ultimately there was not a tradeoff between public health and economic activity. Second, we find that weather, public policy, population density, and demographics appear to drive most of the differences in mortality rates. We observe learning-by-doing among medical professionals, lowering mortality rates. Third, regulations in some countries protected affluent citizens while the economic and health costs were borne by poorer citizens. Fourth, it is well worth investing in preventative measures that will allow us to more quickly respond to future crises, both with respect to public health and climate change.”
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ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit www.aaea.org.
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