The Economics of the Coronavirus Pandemic

The coronavirus pandemic has become a defining event of our times. There is no “normal” in our lives today. Everything has changed. For nearly a year, we have all been affected by the disease in one way or another. The purpose of this article is to try to enlist the power of economics to help understand some aspects of the coronavirus pandemic. The pandemic has not just been a public health disaster. It has also caused an economic disaster. The disease has caused significant rises in unemployment and drops in Gross Domestic Product around the world. In the longer-term cost is that a large number of people, mostly women who are mothers, appear to have been leaving the labor force altogether. In discussing policy responses to the pandemic, we can distinguish between two different classes of responses: one addressed to the health issues raised by the pandemic; the other addressed to the economic issues. An important point to bear in mind is that the health and economic policies are related.