Social trust key to beating the Covid-19 pandemic, according to leading macroeconomic influencers

GlobalData Thematic Research 27 April 2020 (Last Updated April 27th, 2020 09:42)
Social trust key to beating the Covid-19 pandemic, according to leading macroeconomic influencers

Social trust and a collective effort by society will play a major role in controlling the Covid-19 pandemic. The US government’s chaotic approach towards handling the outbreak shows the damage caused by ignoring physical distancing rules. With double digit unemployment figures predicted for 2020 and 2021 and deficits close to the Great Depression levels, enforcing social responsibility among the general public is essential.

Jim Stanford

Jim Stanford, an economist and Director of Centre for Future Work at the Australia Institute, shared his article on the importance of social distancing rules in controlling the spread of Covid-19 disease. He compared the divergent approaches taken by Canada and the US in handling the Covid-19 pandemic.

The US has witnessed hundreds of protestors who opposed the lockdown measures implemented by the government. The government has also been accused of adopting partisan measures in providing aid and medical supplies to various states. Canada, on the other hand, has placed its public healthcare system on the forefront and ensured distribution of resources evenly.

Paul Krugman

Paul Krugman, a Nobel laureate and author, tweeted on the deficit projections made by Congressional Budget Office (CBO) for 2020 to be close to World War II levels as a share of GDP. The CBO also predicted that long-term interest rates are at record lows.

Krugman noted that the government is trying to find excuses not to help the people in need and punish the blue states.

Anders Åslund

Anders Åslund, an economist and author, tweeted that low oil prices are good for democracy and the economy. He recommended that the US government should not bail out big oil companies.

Åslund added that high oil prices can lead to authoritarianism, while low prices tend to promote democracy.

Gray Kimbrough

Gray Kimbrough, an economist, tweeted about how the expansion after the 2001 recession was the first in decades but failed to generate a high sustained rate of GDP growth. He added that the expansion after the Great recession was even worse in generating GDP growth.

Kimbrough noted that this change affected everyone but most importantly those people who were entering adulthood and joining the working population.