Economics has a funny way of confounding intuition and empirical observation. That often makes it infuriating and fascinating in equal measure. Now ‘Freedom Day’ is here, we might think that this is a case of the economics trumping concerns about our health. But, in fact, there is no trade-off between the two and bad health policy is also bad economic policy and vice-versa.
It’s been a stop-start period of 18 months, but it could be argued the vaccine rollout is so far advanced we have built a wall against Covid that will allow us to open up and get the economy motoring again. But the arguments for circumspection and caution during a rapid opening are more compelling.
Superficially, at least, it seemed the lockdown regime we entered in March 2020 directly harmed the economy. As soon as we entered a lockdown, the economy shuddered to a halt. Economic activity fell in manners that our statisticians could not really place in a modern context. Sectors that depend on social interactions, that are so important in our economy, proved particularly vulnerable.
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