martes, 17 de noviembre de 2020

HEALTH VERSUS THE ECONOMY OR BOTH ? by Marta

 

No sign of a health-economy trade-off, quite the opposite

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.

Economic decline in the second quarter of 2020 vs rate of confirmed
deaths due to COVID-19

The vertical axis shows the number of COVID-19 deaths per million, as of August 30. The horizontal axis shows the
percentage decline of GDP relative to the same quarter in 2019. It is adjusted for inflation.

GDP growth from previous year, 2020 Q2-30%-25%-20%-15%-10%-5%Confirmed deaths per million people (Aug 30)0200400600800United StatesUnited StatesJapanJapanIndonesiaIndonesiaGermanyGermanyUnited KingdomUnited KingdomFranceFrancePhilippinesPhilippinesCanadaCanadaColombiaColombiaNetherlandsNetherlandsPeruPeruBelgiumBelgiumPortugalPortugalChileChileTunisiaTunisiaIsraelIsraelTaiwanTaiwanAfricaAsiaEuropeNorth AmericaSouth America

Source: European CDC, Eurostat, OECD and individual national statistics agencies

Note: Limited testing and challenges in the attribution of the cause of death means that the number of confirmed deaths may not be an
accurate count of the true number of deaths from COVID-19. Data for China is not shown given the earlier timing of its economic
downturn. The country saw positive growth of 3.2% in Q2 preceded by a fall of 6.8% in Q1.

Endnotes

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