Weekly Selection 10 April 2020

The cluster effect: how social gatherings were rocket fuel for coronavirus

(The Guardian, April 9, 2020)

This article explains how social gatherings of different sorts (religious, social, cultural, etc.) helped spread the virus. This is the so-called “cluster-effect” that turbo-charges the spread of the pandemic. It begs the fundamental question of whether governments, when they start relaxing social distancing measures, will allow large social, cultural or religious gatherings to go ahead. As one mathematician observes, the best way to think about the pandemic is not as a curve but as a loop: “As soon as restrictions are loosened, there could be new clusters that allow the spread to accelerate again” (reads in 8-10 min).

Sony Kapoor and Willem Buiter, To fight the COVID pandemic, policymakers must move fast and break taboos

(VOXeu, April 6, 2020)

Earlier this week, we had an online conversation with Lord Adair Turner on monetary finance and there is already evidence (in France and the UK) that central banks are moving in that direction. As this article argues, to combat the coming depression, central banks, including the ECB, must cross the Rubicon of monetary financing and immediately transfer the 20%-30% of GDP this will cost into fiscal coffers. The risk of them to do too little too late far outweigh the risk of them doing too much too quickly (reads in 7-8 min).

Kenneth Rogoff, Mapping the COVID-19 Recession

(Project Syndicate, April 7, 2020)

The Harvard economist observes that, until we get a better sense of when and how the Covid-19 public-health crisis will be resolved, economists cannot even begin to predict the end of the recession that is now underway. Still, there is every reason to anticipate that this downturn will be far deeper and longer than that of 2008. The short-term collapse in global output already seems likely to rival or exceed that of any recession in the last 150 years; and until the health crisis is resolved, the economic situation will look exceedingly grim (reads in 5-6 min).

Kishore Mahbubani, Can humanity make U-turns?

(The Straits Times, April 9, 2020)

The author of the just published “Has China Won?” (with whom we’ll have an online conversation on 28th April) makes the case for multilateralism. He explains why we should be supporting organisations like the WHO by resorting to the following metaphor: “Multilateralism sounds boring. To explain it simply, let's return to the boat analogy. If we 7.5 billion people are now stuck together on a virus-infected cruise ship, does it make sense to clean and scrub only our personal cabins while ignoring the corridors and air wells outside, through which the virus travels?” (reads in 5-6 min).

David Brooks, The Three Equations for a Happy Life, Even During a Pandemic

(The Atlantic, April 9, 2020)

Brooks teaches a class at the Harvard Business School on happiness, a field whose science has exploded over the past three decades. He shares three equations for wellbeing: (1) Subjective wellbeing (the scientific word for happiness) = genes + circumstances + habits; (2) Habits = faith + friends + work; (3) Satisfaction = what you have divided by what you want. A great introduction to the ‘science’ of happiness in just a 7-9 min read!