The Economic Impact of Stay At Home
- Tory Wright
- Apr 6, 2020
- 4 min read
The Data Deficit In Assessing Potential Increases In Mortality Rates for a Potential Economic Collapse As a Result of the Stay At Home Efforts During the COVID-19 Pandemic
Abstract:
Though the concerns over the economic impact of the stay at home campaign during the COVID-19 pandemic are intuitively warranted, the data to assess the risk with confidence is lacking. There are many examples of recessions and depressions to draw from and a few examples of crises that could be and sometimes are categorized as collapses. The latter is the most obvious for producing increases in mortality rates; however the particulars of the existing examples do not seem likely to aid in risk assessment for the common conditions. Where crises have been severe enough to produce increases in mortality rates; the increases have been just as attributable to extraordinary, preexisting, severe, social and/or economic issues. The data that exists is not showing increases in mortality rates in common economic crises; and there are no economic collapses severe enough to produce increases in mortality rates without extraordinary circumstances in modern record.
Economic Crises:
Recessions:
The Great Recession is an example of a particularly severe recession; and a good example of what is common in recessions concerning effect on mortality rates. Not only do mortality rates not increase in recessions, they actually decrease significantly. This is attributed in literature to decreases in heart disease; which itself has a large effect on mortality rates.
Depressions:
The Great Depression is an example of a particularly severe depression; and a good example of what is common for depressions. The initial impact on mortality rates in depressions is commonly similar to that of recessions; except for a small increase, following the initial decrease.
Collapses:
There really are no good modern examples of a severe economic collapse. It’s initially difficult to classify crises; as there are sometimes attributes of existing crises that fit two definitions. For instance the Great Depression is often considered and referred to as a collapse. This is due to the loss of established complexity that occurred during it. This definition also makes it difficult to classify the severe crisis in Venezuela as a collapse; as the major issue with Venezuelas’ economy, going into crisis was lack of established complexity.
A Unique Case:
There is one example of an economic crisis that resulted in an increase in mortality rate, that exceeds the case fatality of COVID-19; as of April 5, 2020. This is the fall of the USSR at the turn of the century. The literature attributes the increase to a rise in vascular disease, drinking, murder, suicides and car accidents. The increase is surprisingly substantial and estimated to be 2.5 to 3 million. Understanding this requires being aware of the enormous problem with organized crime that existed in Russia; at the time. The economic crisis exacerbated the issue; and it flourished. Many organizations and small businesses were extorted and bullied for several years.
Disparity:
The literature tends to appreciate that mortality rates in wealthy countries do not tend to be negatively effected by economic crises. This isn’t so much the case for poorer countries. As a preexisting economic issue, poorer countries can and do suffer increases in mortality rates. This can be a consideration for global disparity among countries; or even regional disparity in individual countries that may be considered of the more wealthy. These effects might be seen in India and China as well as many third world countries. The probability of an economic crisis of the severity that is documented having increases in mortality rates that exceed case fatalities of COVID-19 as of April 5, 2020 is very small.
The Crisis of Concern:
The condition that is most likely to produce mortality rates that exceed COVID-19 fatalities is substantial loss of established complexity. The stay at home campaign is effecting the supply side and chains of countries around the globe. Where there is no doubt that the current condition is one that creates risk of the crisis of concern and increases that risk over time, there is total lack of relevant data on that particular type of global crisis, as one has not happened in modernity.
The Other Crisis of Concern:
Anyone paying close attention to global economics is aware of an impending, severe financial crisis. The business as usual that everyone is eager to get back to was and is definitely going to result in severe crisis. Before this particular crisis, which is likely to create room for growth, following it, there may have been a window of a few to several years of instability before the event. This particular instance is likely to postpone the failure event for a time. Though there is no reason to think that the risks of a failure event would have the potential for severity that a breakdown of supply side and chain can produce, the argument that a severe crisis was going to happen regardless, due to a system that fails cyclically by design still begs questions about our concerns over killing the economy; as it’s something that we all do every day of our lives.
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