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Flavio Toxvaerd Profile picture
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12 Nov, 5 tweets, 2 min read
I've been trying for some time to find a killer metaphor for why it's worth taking a short-term economic hit to better control the epidemic and thereby improve both future health and increase future economic prosperity. 1/5
#EconTwitter #EpiTwitter
Most people immediately recognise static tradeoffs such as "more of one thing means less of another thing". That's why the infamous "lives versus the economy" has gained such traction in the public debate. 2/5
Right now we face important "inter-temporal" tradeoffs. This means we must trade off costs and benefits today versus costs and benefits tomorrow. The epidemic and the economy are both dynamic objects, changing over time as we act in different ways, and they are intertwined. 3/5
Firefighting is a decent metaphor, because we understand that if we take time off putting out fires today to go and enjoy the garden instead, then the fire will spread, making things far worse down the line. 4/5
Another metaphor that works well is overfishing. Catching more fish today increases earnings, but by depleting the stock of fish, may lead to lower catches in the future. And so it is with the epidemic. Controlling it better today makes it easier to control in the future. 5/5

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More from @toxvaerd1

Flavio Toxvaerd Profile picture
11 Nov
The UK government is flying blind, introducing policies without proper prior assessment of their likely impact on the epidemic or the economy. This is now completely clear. Below I'll go through what we now know.
#EconTwitter #lockdown 1/15
On Oct 18, I wrote a long thread about the misalignment between disease control advice received by the government from SAGE and the economic advice received by the Treasury. 2/15
I pointed out that disjointed advice was just not useful and that integrated economic-epidemiological analysis was badly needed. These are very complicated issues and we cannot afford to wing it and hope for the best. 3/15
Read 16 tweets
Flavio Toxvaerd Profile picture
11 Nov
The Danish Economic Council’s recent report contains an entire 100 page chapter on economics and epidemiology, complete with self-contained intro to epi models and a review of the new literature. #econtwitter @t0nyyates @DORsSekretariat @DalgaardCarl 1/3
In addition, it contains a number of different policy experiments and a very thorough discussion of the interaction of the economy and the virus. This is seriously impressive policy work and a model for how things can be done. 2/3
Notably, this body is set up to give unbiased, un-politicised advise to guide policy and inform the public. There’s no reason we cannot have a body doing that kind of valuable work in the UK. Who will step up and back such an initiative? 3/3
Read 4 tweets
Flavio Toxvaerd Profile picture
1 Nov
I think they made two early tactical errors that made it difficult to formulate a comprehensive strategy. (1) lack of early and widespread random texting meant they didn’t understand the scale of the problem. They had only dim idea of speed of spread and of asymptomatic ratio.
(2) by design, they set up silos of expertise that seem to have had minimal mutual communication and coordination. Each would give independent advice on different aspects, and each largely ignoring effects of recommendations on other domain.
I do not want to ignore the tactical missteps as I think they are sufficiently legio to explain many of our problems, even if we disregard the apparent lack of strategy.
Read 8 tweets
Flavio Toxvaerd Profile picture
1 Nov
In discussing control measures, many people think in terms of intratemporal tradeoffs (health vs wealth), while most economists think also about the intertemporal tradeoffs (health AND wealth today vs health AND wealth tomorrow). 1/17

#EconTwitter #EpiTwitter #lockdowns
I think the latter are more important than the former, but very difficult to articulate in a punchy way. What also complicates things is that we face intertwined disease and economic dynamics. 2/17
Leaving aside disease dynamics, shocks to the economy have complicated effects. Amplification effects can lead shocks to one part of economy to influence other parts and then back again. Propagation effects mean that shocks have additional impact over time. 3/17
Read 17 tweets
Flavio Toxvaerd Profile picture
30 Oct
It now appears that infection numbers are worse than the “worst case scenario”. What does that mean and does this indicate a failure of the policies that the government has put in place?
1/10
#EconTwitter #epitwitter
bbc.co.uk/news/health-54…
Let’s recall what the “reasonable worst case scenario” means. This is the outcome that epidemiologists think will occur when (i) people do not engage in ANY spontaneous behaviour change to protect themselves and (ii) government imposes NO restrictions on social interactions.
2/10
In other words, it’s what one can predict based solely on biological considerations, knowledge of the disease, environmental factors, population density etc. It intentionally ignores behaviour and policy.
3/10
Read 10 tweets
Flavio Toxvaerd Profile picture
10 Oct
I like to think of local restrictions in terms of hotspotting, a term from firefighting. Idea is to identify parts that are particularly dangerous or conducive to additional spread and dealing with those first.
But one should not lose sight of the overall fire. We cannot do each local part without an eye to the whole. The big difference is of course that local measures have differential impact on incomes and a global public good is being provided.
This means that we need to compensate for that public good provision. It’s not charity.
Read 4 tweets

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