In a digital, online joint meet-up of the Global Behavioral Economics Network (Collaboration between VBEN and ZBEN) on July 15, 2020, Nobel prize winner Paul Romer discussed in an interview how economy and society can overcome the corona crisis successfully.
The number of new COVID-19 infections is rising dramatically in the U.S., and other countries are also having to deal with an increase in the number of infections. The corona crisis is not over yet, there is still the risk of a second general lockdown with extensive restrictions in public life.
But how can we avoid this scenario? And can society and the economy cope with a second wave at all? These questions were addressed by Nobel laureate and Professor of Economics at New York University Paul Romer in an interview with Prof. Dr. Nora Szech (Chair of Political Economy, at the Karlsruhe Institute of Technology) on July 15th 2020, in an online event of the Global Behavioral Economics Network with more than 240 attendees.
“We cannot fix the economy unless we have a clear plan on how to deal with the pandemic”, Romer stated with conviction. The crisis goes far beyond the economy alone: “It is also a crisis in science that sticks to theories rather than looking for new, innovative ways. This virus is different. And science has to learn to react differently to it”.
An example is digital contact tracing. This works well in theory, but it fails in practice due to people’s distrust of technology and politics. Likewise, according to Romer, hoping for the panacea of a possible vaccine is not a solid strategy: “It is naive to believe that everything will be over immediately.” On the contrary: In practice, people’s distrust paired with widespread skepticism about vaccination could create unexpected hurdles.
Romer’s suggested approach is different: Test more people more often and more quickly, to isolate potential super spreaders as quickly as possible. This helps us deal with the fact that some test results are still inaccurate. “Knowing more is always better than less. And even with many inaccurate tests, we know more afterwards than before testing. People just have to learn that it helps to be tested regularly in order to fight COVID-19”.
A lot of countries are on the right path to developing successful strategies for living with the pandemic. Specifically: “China and Europe will lead the world out of the economic crisis”, according to Paul Romer.
About the Vienna Behavioral Economics Network (VBEN)
The Vienna Behavioral Economics Network was founded to share the findings of Behavioral Economics research with interested people. Since our events take place online due to COVID-19, we have been able to inspire people all around the world for behavioral economics. That is why the Global Behavioral Economics Network was created (Collaboration between VBEN & ZBEN). It is a platform for the exchange between science and practice. Experts will present their experiences in practical application and evidence-based research on behavioral economics at our events on a regular basis.
Managers, politicians, scientists, students and of course all other people who are interested in the field of Behavioral Economics are invited and welcome.