There are three reasons we are likely to need strong aggregate demand stimulus after tight social distancing restrictions are over. 1. First, despite efforts to compensate people for economic losses from social distancing, many households and firms are likely to reduce their spending because of increased debt they bear—and for many, from being bankrupt. Intermezzo. The second and third reasons stem from the likelihood that the tight social distancing restrictions will not end cleanly and be over for good. Even if nationwide or nearly nationwide lockdowns are over, there is likely to be a rolling set of regional lockdowns and the coronavirus resurges in

This is a guest post by Gary Cornell. Gary holds a Ph.D. in mathematics from Brown University and was the co-founder of the the major technical publisher Apress. He has written or co-written numerous best selling programming books and has been a Mathematics professor, a visiting scientist at IBM’s Watson Labs and a program director at the National Science Foundation.
I’m not a doctor nor do I play one at daily press briefings. But like most mathematicians, I do know something about basic statistics. And, like most academics, I read everything that comes out about drugs I am taking. Obviously, I concentrate on the statistical sections and the list of side effects and drug interactions in these research papers. And so, this being 2020, I have a google alert for the drugs I am taking.

Hilary Potkewitz’s March 23, 2020 Wall Street Journal article “How to Avoid Eating All Day While Coronavirus Keeps Us Working From Home” has at least two important points about how to eat during this COVID-19 lockdown. First, set time limits on eating. Nutrition director Elisabetta Politi, whom Hilary interviewed, gives the weak—but still very helpful—version of this. She says: Make mealtimes very clear, so everybody knows there is a time to eat and time to not eatDietition Kristin Kirkpatrick gives a stronger version. Hilary gives this account of that part of the interview:“Now is a great time to try out some periodic fasting techniques,” she says. Also

There is a huge public debate whether the economic costs of actions designed to arrest the spread of COVID-19 are worth the potential health benefits achieved.
Literally trillions of dollars in lost economic output and uncounted lives hang in the balance. No rational discussion of this weighty issue is possible without first having a hard-nosed discussion of the dollar value of saving the lives of COVID-19 patients.
This post will focus on the well-established methods that health economists have devised to answer this question.
Why Set a Price on Human Life if it is “Priceless”?
Attaching a price to human life will strike some readers as uncomfortable, if not offensive. Indeed, Governor Andrew Cuomo recently tweeted “you cannot put a value on a human life.” And he is right in important

Author: Alexander HamiltonTo the People of the State of New York:ASSUMING it therefore as an established truth that the several States, in case of disunion, or such combinations of them as might happen to be formed out of the wreck of the general Confederacy, would be subject to those vicissitudes of peace and war, of friendship and enmity, with each other, which have fallen to the lot of all neighboring nations not united under one government, let us enter into a concise detail of some of the consequences that would attend such a situation.War between the States, in the first period of their separate existence, would be accompanied with much greater distresses than it commonly is in those countries where regular military establishments have long obtained. The disciplined armies always

Faced with an argument that the proposed Constitution would allow a standing army, Alexander Hamilton parried with the argument that, without the Constitution, the states would end up with standing armies to defend against one another. Moreover, he argued that the transitional period to these standing armies, War, therefore, would be desultory and predatory. PLUNDER and devastation ever march in the train of irregulars.This also, is bad. John Jay in Federalist Papers #5 and Alexander Hamilton in Federalist Papers #6 and #7 had prepared the stage by making the argument that, if not united, the states would be at each others throats. See:I have to say that,

Christine Larson’s journalism career had a somewhat colorful beginning. During her first job at Cosmopolitan, the magazine redecorated the apartment where she lived with two roommates and repainted it Pepto-Bismol pink. She also wrote graphic novel comic books about celebrities, including Metallica and Prince.
“That was fun, but it also taught me a lot about what it takes to be a person trying to make a living in a creative field,” said Larson, an assistant professor of journalism in the College of Media, Communication and Information (CMCI) at CU Boulder.
Larson went on to work as a freelance journalist for 15 years, writing award-winning articles and essays for The New York Times, The Wall Street Journal, U.S. News & World Report and other publications, as well as co-authoring books on

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The Coronavirus Outbreak

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Two key tools for economics are coming up in the context of the coronavirus pandemic: logarithms and cost-benefit analysis. As for logarithms, the Financial Times has been producing graphs such as the one above. The vertical axis is logarithmic: that is, every time the number of new cases in a week goes up by a factor of ten, the increase in height shown is the same. The horizontal axis is in days since the first time a country had 200 cases in one week. Given the logarithmic vertical scale and the horizontal scale in days, the slope of each country’s curve shows the growth rate of the number of new cases. In addition to the graph above of the number of new

I’m 38 and have no underlying health conditions. I figured if I got it, I’d shake it. Here’s how things have played out. Firstly, it’s not the flu. Whoever originally said that, did everyone a great disservice. This thing is not the flu. It’s a nasty, horrible, illness. 4/

I am now a Certified Professional Co-Active Coach. I posted “Co-Active Coaching as a Tool for Maximizing Utility—Getting Where You Want in Life” at the beginning of that journey. Because of my day job as an economics professor and side job as a blogger, I can’t take on any more coaching clients at this point, but I have met other coaches that I can recommend. The Co-Active Training Institute does a ten-month long Leadership Program as well as training in being a co-active coach. Among other things, the Leadership Program is a very intense interpersonal experience; after the first six-day retreat I already know the other sixteen members of my “tribe” very well. Victoria

Advice for leaders: In a crisis, forget petty calculation. Appeal to people’s better angels. Tell them you have nothing to offer but "blood, toil, tears, and sweat." Urge them to come together to work and struggle and sacrifice, as Lincoln and Churchill did, and they will.

Image created by Miles Spencer Kimball. I hereby give permission to use this image and the text of this wish for anything whatsoever, as long as that use includes a link to this post.

In the third week of February, as the COVID-19 epidemic was still flaring in China, I arrived in Kolkata, India. I woke up to a sweltering morning—the black kites outside my hotel room were circling upward, lifted by the warming currents of air—and I went to visit a shrine to the goddess Shitala. Her name means “the cool one”; as the myth has it, she arose from the cold ashes of a sacrificial fire. The heat that she is supposed to diffuse is not just the fury of summer that hits the city in mid-June but also the inner heat of inflammation. She is meant to protect children from smallpox, heal the pain of those who contract it, and dampen the fury of a pox epidemic.The shrine was a small structure within a temple a few blocks from Kolkata Medical College. Inside, there was a figurine of the

Philosophers and mystics have long contemplated the disconcerting notion that the fixed self is an illusion. Neuroscientists now think they can prove it or, at least, help us glimpse this truth with some help from psilocybin, the psychoactive property in magic mushrooms.Researchers around the world are exploring the drug’s transformative power to help people quit smoking; lower violent crime; treat depression, anxiety, and post-traumatic stress disorder; and trigger lasting spiritual epiphanies in psychologically healthy people, especially when coupled with meditation or contemplative training.There are some limitations to psilocybin studies—they tend to be small, and rely on volunteers willing to take drugs and, thus, open to an alternate experience. But the research could have major

Note: Don’t miss the related post “Avoiding Economic Carnage from the Coronavirus: There are Better Policies than Sending Everyone $1000.”The novel coronavirus behind COVID-19 is extremely good at spreading. It is likely to take a long time to get an effective vaccine. Restrictions on interaction that apply to the vast bulk of the population quickly come to seem quite onerous. As a result, the end of the most serious part of the pandemic is likely to end only when a substantial fraction of the population has had COVID-19 and is immune. (As of today, it is still not known for sure how strong the immunity is from having had COVID-19. I’ll assume the best on that score—that having had COVID-19, even asymptomatically, confers immunity.)The idea that a large fraction of the population will end

Credible communication

Critical to containing, and mitigating the effects of, COVID-19 is credibly communicating essential information to the public, without politicizing the message. We have seen in previous epidemics, such as H1N1 in 2009, that when a public health emergency is politicized, citizens become less likely to trust the government to provide reliable information. Such skepticism has consequences. In 2009 it hindered public vaccination efforts, likely resulting in more infections and possibly also fatalities. Similar problems are emerging today, with sometimes conflicting messages emanating from the Trump White House and public health officials, and resulting public confusion and skepticism.

It is thus essential that the Trump administration pair credible

The experiment about the effect of diet on fighting infection was only “performed on a single mouse strain (C57BL/6J) in one mouse facility,” but its results are striking. The three-minute video abstract is well done. (You can see it at the bottom of the image above.) The brief summary from that video is: When the mice are not fed, or glucose is blocked, the mice with the bacterial infection live, while those with the viral infection live. When the mice are fed glucose, the mice with the bacterial infection die, while those with the viral infection live. If I understand the discussion section at the end of the paper, the issue is not effectiveness at killing

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In the second half of The Federalist Papers #7, Alexander Hamilton shows a keen understanding of psychology when discussing the animosity between the states that could be engendered by economic disagreements if the states are not united. Alexander Hamilton points to three areas of potential economic disagreement. Quoting him in each case, Each State, or separate confederacy, would pursue a system of commercial policy [that is, tariff policy] peculiar to itself. The public debt of the Union would be a further cause of collision between the separate States or confederacies. The apportionment, in the first instance, and the progressive extinguishment afterward,

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The Coronavirus Outbreak

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How should macroeconomic policy respond to COVID-19? Twitter has hosted a lively debate in recent days. In this chart, I’ve tried to distill that discussion into three basic strategies: (1/5) pic.twitter.com/rD6N73CuWu— Donald Marron (@dmarron) March 13, 2020
I had a chance to talk through economic policy responses to Covid-19 in my graduate business cycle class yesterday. I very much like Donald Marron’s take on it, which you can see in this Twitter thread, whose first tweet is shown above. I think what I have to say is very much consistent with what he says. He writes that while the epidemic is raging, we want to reduce economic activity in sectors such as restaurants, travel and in-person entertainment in order to reduce transmission of the coronavirus. I am on the side favoring very

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I can just tell you what I do. On a typical day, I do a 4-hour eating window, which implies a 20-hour fast. Then one day a week I skip eating entirely. Occasionally I do longer fasts—a 7-10 day anti-cancer fast once a year and several-day fasts if I see my weight creeping up.

The US Supreme Court yesterday unanimously decided a case that pitted Intel against a former employee and turned out to be a win for workers, as well as for users of the English language who like to think they know what plain words mean.The matter stems from a dispute over the deadline for filing a claim under the Employee Retirement Income Security Act of 1974 (ERISA). Its outcome turned on the meaning of a phrase that sounds simple enough on its face—actual knowledge—but here led to very different interpretations with serious ramifications for employers and workers.ERISA provides three different cutoffs for lawsuits alleging fiduciary wrongdoing: claims must be filed within three years of a plan recipient having “actual knowledge” of a breach; or within six years of the latest violation;

Introduction

Does religion affect economic growth and happiness? How do societies form moral systems? Do Catholic schools make a difference? These are just a few of the important questions economics can help us answer about religion and its practice around the world. Freely available for a limited time, this collection of articles from The Quarterly Journal of Economics delves into issues of church versus state, religious tolerance, and secularization within a refined economic framework. As global religious involvement and affiliation evolves, we will continue to see its effects on the economy and on our ethical systems, presenting an ever-growing need for discussion.

Enjoy this new collection, and discover the complex interplay between religion and economics from Indonesia and Italy

An ethereal beauty runs through the Harvard Art Museums’ new exhibit of Japanese paintings drawn from one of the largest and most significant gifts of art ever promised to the University. The more than 120 works that occupy all four of the museums’ third-floor temporary exhibition galleries have been carefully curated from the Feinberg Collection, a trove of more than 300 decorative scrolls, folding screens, fans, woodblock-printed books, sliding doors, and other works. The collection assembled by Robert ’61 and Betsy Feinberg highlights the range and richness of early modern Japanese painting during the Edo period, 1615‒1868.
“They have collected so carefully and with such dedication over the years that they have formed a comprehensive collection. It really allows us to look at the

Yuval Levin is the director of Social, Cultural, and Constitutional Studies at the American Enterprise Institute (AEI). He also holds the Beth and Ravenel Curry Chair in Public Policy. The founding and current editor of National Affairs, he is also a senior editor of The New Atlantis and a contributing editor to National Review.

In this post, let me present a solution before more fully presenting a problem for negative interest rate policy that shows up in news articles such as the three Financial Times articles shown above. The SolutionIt is time for the next step in negative interest rate policy. Even without any change in paper currency policy, it is