COVID-19 more than an ill-health : combined supply-side and demand-side shocks

Abstract

COVID-19 mitigated restrictions have avoided countless deaths and infections while simultaneously disrupting livelihoods and economies. The global loss of gross (world) product is unprecedented as COVID-19 has inflicted both supply-side and a demand-side shocks. While public health measures have mitigated morbidity and mortality with positive effects on cross-country economic results, the decline in global Gross Domestic Product is leading to diminished spending on healthcare, the environment, and social wellbeing. In addition to the current challenges, there will also be various long-term implications of lasting illness (“long COVID”) which are still to be determined. Numerous and varied economic stimuli packages have been instituted by different countries aiming to revive economies in the short term and thereby also mitigate long-term implications. In line with these measures, as a result of the COVID-19 vaccine roll-out, European countries have initiated discussions on vaccine-immunity passports to enhance mobility and assist economic recovery. However, this will not resolve the economic scars, the impaired innovation outcome and the healthcare fatigue that are expected to linger for years. While uncertainty is certain, this very uncertainty highlights the need for unbiased and rigorous quantitative evaluations of all possible decisions. A “nuanced approach” to the easing of restrictions must take into account the balance of immediate mortality and both short- and long-term morbidity versus the even longer-term risks of widening health, education and wealth inequalities and decreased life expectancy among the more socially and economically vulnerable.