Engendering the Recovery: Budgeting with Women in Mind

By Antoinette Sayeh, Jiro Honda, Carolina Renteria, Vincent Tang International Women’s Day, March 8, marks a year from the start of widespread lockdowns in response to COVID-19. As an IMF blog warned back in July, women have borne the economic and social brunt of the pandemic. With many governments preparing budgets for the next fiscal […]

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The Evidence Is in on Negative Interest Rate Policies

By Luis Brandao-Marques and Gaston Gelos عربي, 中文, Français, 日本語, Русский  Interest rates are low, and “lower for longer” has become something of a mantra among policy makers, regulators, and other market watchers. But negative interest rates raise an entirely new set of questions. After eight years of experience with negative interest rate policies, the initial skepticism (paying interest […]

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The Haves and Have-nots Of the Digital Age

By Gita Bhatt Accelerated by the pandemic, the digital future is coming at us faster than ever before, and maybe faster than we can imagine. In this issue, we explore the possible consequences—the good, the bad, and the gray. For millions, technology has been a lifeline, changing the way we work, learn, shop, and entertain […]

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The Great Divergence: A Fork in the Road for the Global Economy

By Kristalina Georgieva As G20 finance ministers and central bank governors meet virtually this week, the world continues to climb back from the worst recession in peacetime since the Great Depression. The IMF recently projected global GDP growth at 5.5 per cent this year and 4.2 per cent in 2022. But it is going to […]

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Structural Factors and Central Bank Credibility Limit Inflation Risks

By Gita Gopinath After ending last year with unexpectedly strong vaccine success and hope that the pandemic and economic distress it caused would recede, we woke up to the reality of new virus variants and the unpredictable, winding road that it can lead the world down. Something similar has happened with the discourse on inflation. […]

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Charley Hooper on Masks

I posted recently about the discussion between Phil Magness and Jeremy Horpedahl about mask mandates to deal with COVID-19. My sometimes co-author and former student Charley Hooper wrote the following on masks in a recent email. He’s given me permission to share it. The bottom line: the evidence in favor of masks, let alone mandates, just does not seem to be there.

Here’s Charley:

The only randomized controlled trials conducted to study the effects of wearing masks and washing hands show that those two preventative techniques don’t significantly reduce the spread of the influenza virus. In some studies they help a bit. In other studies, they hurt a bit.

“Although mechanistic studies support the potential effect of hand hygiene or face masks, evidence from 14 randomized controlled trials of these measures did not support a substantial effect on transmission of laboratory-confirmed influenza.”

[Source: https://wwwnc.cdc.gov/eid/article/26/5/19-0994_article]

Why did I mention influenza and not COVID? COVID-19 is supposed to be transmitted by the same mechanism as influenza and influenza has been around long enough to be better studied.
The Xiao study referenced above contains this shocking admission: “It is essential to note that the mechanisms of person-to-person transmission in the community have not been fully determined. These uncertainties over basic transmission modes and mechanisms hinder the optimization of control measures.” Scientist don’t have a handle on how the flu transmits throughout the community. If you don’t know that basic fact, it’s pretty hard to effectively prevent the transmission of influenza! By extension, I think it’s safe to say that scientists don’t understand how the SARS-CoV-2 virus is transmitted.
The influenza virus can last about five minutes on a human hand. (“Virus survived on hands for up to 5 min after transfer from the environmental surfaces.”) I suspect that the SARS-CoV-2 virus lasts about the same length of time on hands.
Therefore, if you don’t wash your hands but also don’t touch your eyes, nose, or mouth shortly after touching an infected surface. you should be fine.
There was one randomized controlled trial of the use of face masks to prevent COVID-19. The study was conducted in Denmark in April and May 2020. The results were not statistically significant but showed that the mask group suffered a 1.8% infection rate while the control group suffered a 2.1% rate (95% confidence intervals = 46% reduction to 23% increase due to masks). In other words, masks helped but were not a panacea.
Other studies show the benefits of wearing masks, but they are correlational, population-based studies that identify relationships but don’t necessarily prove cause and effect. I’m not saying that masks don’t work. I’m instead highlighting some of the scientific uncertainty around the use of masks. With this uncertainty, COVID absolutism is unjustified and harmful.
The rule seems to be that the less people understand about something, the more adamant their beliefs.

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Why Climate Change Vulnerability Is Bad for Sovereign Credit Ratings

By Serhan Cevik and João Tovar Jalles Climate change has made the world a riskier place. The destruction wrought by heatwaves, droughts, hurricanes, and coastal flooding doesn’t stop with the toll on human lives and livelihoods—it can also have deep consequences for a country’s finances. Recent IMF staff research has found that a country’s vulnerability […]

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Chart of the WeekWhen it Comes to Services vs. Manufacturing, Words Matter

By Reda Cherif and Fuad Hasanov Efforts to revive national manufacturing sectors get a lot of airtime. After all, the sector propelled many East and South East Asian economies—the so-called “East Asia Miracle”—and was a gateway to the middle class for millions of workers. However, for all the obsession with manufacturing, economists for their part […]

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Will Walmart Save America?

My question is only partly rhetorical. Just two days after I published my post “Vaccine Adventures,” I read in the Wall Street Journal that the federal and state governments had started allocating vaccines to large pharmacy chains, including Walmart (Sharon Terlep and Jaewon Kang, “CVS and Walmart Decide Who Gets Leftover Covid-19 Vaccine Doses,” February 11). After reading this story in the wee hours of February 12, I went on Walmart’s website and, in just a few minutes, made myself an appointment for six days later. Appointments are available at 20-minute intervals during the whole day.

The efficiency of Walmart is legendary despite its being a behemoth, just as the inefficiency of the government is legendary because it is a behemoth (and other reasons explored by the economics of public choice).

Yesterday, another Wall Street Journal story described the rollout of Walmart’s Covid-19 vaccination (Sarah Nassauer, “Walmart’s Covid-19 Vaccine Rollout Heads to Small Town,” February 14). To get an idea of “what the weather [is] really like on earth” (le vrai temps qu’il fait sur la terre) to borrow an expression from Saint-Exupéry (in his novel Southern Mail or Courrier Sud), a few quotes from this Wall Street Journal story are useful:

Skowhegan, Maine—Pat and John Thomas were watching the news one night last week when they saw that Walmart in this central Maine town of 8,000 people was taking appointments for the Covid-19 vaccination. They had signed up for shots at a hospital about a month ago but still hadn’t heard back. Ms. Thomas, a 74-year-old retiree, jumped on the computer.

On Friday the couple got the Skowhegan Walmart’s first doses …

Walmart Inc., the U.S.’s largest retailer and private employer, is set to become one of the biggest distributors of the Covid-19 vaccine as the federal government enlists retail pharmacies to accelerate what has been a choppy rollout. …

Walmart is likely to benefit in other ways. Many of the people getting the vaccine at the Skowhegan store Friday didn’t previously have patient profiles in Walmart’s system, said [regional Walmart manager] Mr. Tozier. “We are making relationships with new patients,” he said.

Ann Jackson and her husband, Norman Jackson, 73 and 76 years old respectively, arrived for their vaccine appointment midmorning after waiting for weeks to get an appointment at the local hospital, said Ms. Jackson. Later, she added chips, bananas and T-shirts to her cart. “You never want to waste the trip to Walmart,” she said.

Contrary to what I implied in my previous post, there seem to be incentives enough for private pharmacies, at least those with a Walmart sort of efficient logistics, to administer Covid-19 vaccines when Big Brother releases them.

Such recourse to private enterprise could partly protect us from the central planners in DC and the state capitals. But why give the vaccines to some private organizations but not others—say, to Walmart but not to Hannaford? Is it because the central planners know better where demand is most intense or where low-cost distribution is most likely? That would possibly be a first in the history of mankind.

It would have been much more efficient, from the beginning, if the government had sold the vaccines to whoever was willing to buy them in order to make a profit and had given vouchers to whoever wanted to be vaccinated. After this redistribution of purchasing power, the market—that is, individual demands—would have decided where the vaccines should go.

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Chart of the WeekHow e-Government Services Can Pay Dividends

By Ali Al-Sadiq The ability to renew your passport or driver’s license, pay a tax bill, or access government data with the click of a button or swipe of a screen, anytime and anywhere, has grown more important during the COVID-19 pandemic to prevent the spread of the virus. Beyond the obvious efficiency and transparency […]

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