A.C.E.S. Online - Economic Impact of Covid-19

Andy Welki, Ph.D. is a faculty member in the Boler College of Business focusing on the areas of Business Statistics, Environmental Economics, and Managerial Economics. His research interests include issues related to highway safety and highway safety policies, both domestically and internationally. In addition, he also does research in the area of how political and economic freedom connect to highway safety. His work has been published in Managerial and Decision Economics, The Journal of Business Education, and Transportation Research, "Part E: Logistics and Transportation Review". Dr. Welki received the Wasmer Award in 1992, 1997, 2002, and 2008, which recognizes teaching excellence in the Boler School of Business at John Carroll University. He is a strong supporter of JCU athletics and currently serves as the Faculty Athletics Representative for Blue Streak athletics

A.C.E.S. Online The Economic Impact of COVID-19 - 6/25/2020 with Dr. Andy Welki

Remaining unanswered questions:

1. (From Renata) I think the restaurant industry contributes to the spread of COVID. Is it possible to stop all food service to determine which part is most likely contributing to the spread and not starve people? Are home farms the answer? Or would that increase the spread of other diseases?
2. (From Robert Powers) Since medicine in the US is a later part of the economy and is right in the middle of dealing with COVID, but is also economically negativity impacted by the behavioral changes of COVID, how might the economics of medicine change?
3. (From Millcraft Meetup) In your opinion, what does unemployment look like once PPP runs out? And if unemployment increases, how long before it plateaus and ultimately decreases?
4. (From Christopher Rankin) Knowing that Dr. Welki is an awesome stats guy, I’d like to hear his opinions on how some of the models around COVID deaths and other significant health outcomes could have been so inaccurate. Perhaps that could be a future topic?
5. (From Robert Powers) Could COVID be the stimulus needed for the US to get its fiscal house in order; and understand that it is better to be prepared for future economic disasters?
6. (From Tucker Mead) Do you think (and what are your thoughts on this) that there will be legislation passed to protect companies from liability om regard tp COVID transmission within the workplace on the clock? Assuming the company is following all state & federal guidelines.
7. (Anonymous) What is your opinion on the rising debt for all US taxpayers and citizens as well as how that will affect our future domestic and international economic relationships?
8. (From ACES-ECON) What impacts do you see for the education sectors specifically K-12 and secondary colleges as a result of the pandemic? Also, do you feel that the consumer will be willing to pay more for items made in the USA vs. those made abroad?
9. (From Gelber) With international travel banned or restricted at this point, do you anticipate a significant spike in COVID cases as more Americans hit the road and travel state to state? Should the US government ban out of state travel to possibly prevent this potential spike in hopes of a vaccine being made available?
10. (From Deleidi) when comparing to the EU response to COVID, how do you evaluate the US response?
11. (Anonymous) In your opinion, what will be the time lag between hopeful medical advances towards a vaccine and the economic turnaround as it relates to unemployment, big business, and small businesses? Will it depend on people’s perception of the risk of infection?
12. (Jason Robins) Class of 2010. What are your thoughts on the impact on the possibility of: sports on the university campus, and pro-level not allowing fans to participate. Also, universities possibly limiting students on campus if allowed at all?

In questions 1, 8 and 10 I see a common theme around the idea of people coming together in groups.

The underlying challenge is that humans are social animals and there is no substitute for human interaction and connectivity. Yes, technology can play a part, but anyone who has lived in the world of zoom knows it is not the same as a person to person interaction.

Therein lies the challenge. We crave human interaction yet human interaction exposes us to the possibility of the virus. It is a continuum along which individuals have to make choices and that opens up the challenges. 

Think of a different example, alcohol consumption. There are two extremes, no drinking and overly excessive drinking. Either end point is untenable. So where along the continuum is the boundary and how do you manage a boundary when everyone wants to set their own boundary because of how they see themselves (e.g. I can hold my alcohol, I am not impaired).

The opening up of the world after lockdown has too many people ignoring all the distance protocols and businesses (at least some) not enforcing any boundaries. The challenge is what are the enforcement mechanisms if people choose to behave badly especially if they may not bear the consequences of their bad decisions.

At the end of the day, it is personal accountability and the acceptance of a social responsibility to protect each other. In a land of personal freedom and individual “rights”s\ that is a significant hurdle.

Questions 2 and 5 are very interesting to me. They are a subset of something that every organization/sector will grapple with. What did we learn and how does that change how we move forward organizationally?

Every sector/organization/firm has been disrupted. What did they learn? How can they do things differently? What worked and did not? Where were the points that breakdowns occur? While we have become more technology reliant over time, never before were we disrupted and forced to infuse and imagine how technology can replace the “this is the way we have always done it” mindset. Change that formerly was incremental is now paradigm shift level. That is where the new frontier is.

As a side bar, the role of public health has never been more important, both domestically and internationally (this ties to #9). The global interconnectedness means a problem anywhere can rapidly become a problem everywhere. Couple this with a serious distrust and disrespect (some justified, some not) for institutions, this area has no easy solution. Trust does not rebuild anywhere as quickly as it can be broken.

For #3, I am not an expert in that area but I think the unemployment challenges will linger through most of 2021, all based upon the speed at which things can open and how opening affects virus spread.

For #6, great question, basically…. if I do what I am told and follow the best available evidence as shared by the government/health officials, am I liable if someone gets infected? Obviously that should include protecting vulnerable populations. For me personally, the company should not be liable. But my mind is simple. I agree it is a “fear factor” for organizations looking to reconvene employees in one place.

For #10, much different situations internationally and domestically, both in terms of heterogeneity of populations and political situations. The polarization of the US political scene does nothing to help the situation. As the US political mantra goes….never let a crisis go to waste.  Embedded in there is the idea of a political advantage and not a societal advantage. Many to many people at the highest levels that see “we” and not “us”.

For #7, that is why fiscal houses should always be in order, not something that has existed in the US for a long time. Like a credit card with no limit (at least is some minds) there will be a day of reckoning how far out and who are the bill collectors remains to be seen.

For #4 (hi Chris) data challenges are a big problem, you are trying to model spread with limited or no information as to who the spreaders are (asymptomatic people, no testing, limited contact and tracing capability). Bad/limited/no data equals bad models and bad predictions.