The pandemic and the economy have been the object of intense political discussion. The following text is taken ipsis literis from the Oxford University based work group, Our World in Data, the reports of which are used for teaching at top universities in the world, and by the most progressive media internationally.
Responses to the pandemic have often been framed in terms of striking a balance between protecting people’s health and protecting the economy. There is an assumption that countries face a trade-off between these two objectives. But is this assumption true? A preliminary way of answering this question is to look at how the health and economic impacts of the pandemic compare in different countries so far. Have countries with lower death rates seen larger downturns? Comparing the COVID-19 death rate with the latest GDP data, we in fact see the opposite: countries that have managed to protect their population’s health in the pandemic have generally also protected their economy too.
Have the countries experiencing the largest economic decline performed better in protecting the nation’s health, as we would expect if there was a trade-off? The chart here
shows the same GDP data along the horizontal axis. Along the vertical axis is the cumulative number of confirmed COVID-19 deaths per million people. Contrary to the idea of a trade-off, we see that countries which suffered the most severe economic downturns – like Peru, Spain and the UK – are generally among the countries with the highest COVID-19 death rate. And the reverse is also true: countries where the economic impact has been modest – like Taiwan, South Korea, and Lithuania – have also managed to keep the death rate low. Notice too that countries with similar falls in GDP have witnessed very different death rates. For instance, compare the US and Sweden with Denmark and Poland. All four countries saw economic contractions of around 8 to 9 percent, but the death rates are markedly different: the US and Sweden have recorded 5 to 10 times more deaths per million. Clearly, many factors have affected the COVID-19 death rate and the shock to the economy beyond the policy decisions made by each government about how to control the spread of the virus. And the full impacts of the pandemic are yet to be seen.
But among countries with available GDP data, we do not see any evidence of a trade-off between protecting people’s health and protecting the economy. Rather the relationship we see between the health and economic impacts of the pandemic goes in the opposite direction. As well as saving lives, countries controlling the outbreak effectively may have adopted the best economic strategy too.
