Thread by @balajis

Two potential microeconomic effects of the virus crisis:

1) Deflation in sectors like travel or hotels as demand falls and prices plummet

2) Inflation in sectors like healthcare (rising demand) or China-sourced parts (falling supply)

That’s before printing & subsidies begin.

Unlike the financial crisis, the virus crisis is causing real deaths and physical disruption of supply chains.

You can't solve a real problem with fake money, but policy makers may try. There will likely be printing.

Hope that printed money flows into medicine & biotech.

Put another way, I strongly disagree with QE but it was a "solution" to the financial crisis that the state could execute with a few keypresses.

The virus crisis is totally different. We can only win with new technology, especially very rapid innovation in medicine and biotech.

Btw, the money printing has already begun in China.

*Without* agreeing with the policy, I understand why a government would do this. It's like an emergency tax to prevent panic.

But it can't be the main response to the virus. That has to be technology.
marketwatch.com/story/china-to…

To be clear, China to their credit is accelerating clinical trials, diagnostics, medical imaging, telemedicine, drug delivery robots, instant hospitals, vaccines, etc.

The virus is accelerating every aspect of biomedicine and forcing wartime levels of innovation.

Ha! I hadn’t even seen this prior to my tweets. *Maybe* printing is part of an emergency solution, but the focus needs to be keeping the healthcare system up and driving biomedical innovation.

We need new tech to stop the virus, esp vaccines and drugs. mobile.reuters.com/article/amp/id…