A second chance for Covid-19 policy: get smarter to avoid another sudden stop – The Property Chronicle
Select your region of interest:

Real estate, alternative real assets and other diversions

A second chance for Covid-19 policy: get smarter to avoid another sudden stop

The Analyst

It is axiomatic of crises that things happen too quickly for decision makers to be able to plan ahead. Well they better be planning now. Desperate measures, little different to those used 102 years ago, have bought governments a second opportunity to deal with Covid-19 in a smarter fashion by building a better toolkit. 

An engineer would define a national lock-down as a failure mode – no one would choose this option if they had a broader set of tools. We must hope governments are planning for a smarter ways to control the next round of infections at the local level. To move away from being forced to pretend everyone is infected and focus on those that are or are vulnerable. 

The stakes are much higher if indeed we are to get a second chance. Pressure to lift restrictions quickly will increase as infection rates fall. But, being wrong owing to under-reaction may be palatable once – it won’t be twice.

How did we end up in this failure mode? A simple decision matrix illuminates the path. 

The matrix is set up as follows. Government, based on advice, makes a decision: Is the Covid-19 break out going to be OK, Hard, or Bad? The world then stress tests that view.

The only way to understand how we got to full lock down is that, for whatever reason (advice or political decision), the initial view was that things were either OK or that there was no point in preparing for Bad (i.e. accept herd immunity through infection). That puts us in the OK column. 

The reality started in the OK row, moving through to Hard and finally toward projections of Bad. 

The Analyst

About Kevin Gaynor

Kevin Gaynor

Kevin is an economist but he asks that you don’t hold that against him. He runs Rational Research, which focuses on strategic advice on market and economic issues to corporates, investors and banks. Kevin was Head of International Research and Asset Allocation at Nomura, Chief Markets Economist at RBS Markets and Chief European Economist and Equity Strategist at UBS. He has no need for physics envy: he studied Physics as an undergrad before moving on to a PhD in Economics.

Articles by Kevin Gaynor

Subscribe to our magazine now!