A pandemic is a global outbreak of a (new) disease. It is an epidemic that has spread over several countries or continents, affecting a large number of people.
The worldwide coronavirus outbreak was officially declared a pandemic by the World Health Organization (WHO) on March 11 during a media briefing. According to WHO Director-General Tedros Adhanom Ghebreyesus, Ph.D., the decision to classify COVID-19 as a pandemic was not easy but resulted from concern for "the alarming levels of spread and severity, and by the alarming levels of inaction."
Generally, a pandemic will likely spawn a plethora of legal and ethical dilemmas and political and economic consequences, and its impact will depend to a large extent on the public's (government inclusive) perception of and reaction to the crisis.
Pandemics, like many other natural disasters, offer a unique opportunity to study how economies work. Little is known about their medium- to long-term macroeconomic effects though a lot of studies have been carried out to gauge the likely economic fallout.
The coronavirus pandemic has dramatically disrupted the everyday social and economic patterns of societies around the world. Economists have focused on its economic impact and on what central banks and governments should do in response to an unusual simultaneous disruption of both supply and demand.
What is Pandemic Economics?
While series of studies have been carried out on past pandemics and projections made about current and future pandemics, economists have shied away from defining the term pandemic economics and from providing a generally acceptable and rational framework for dealing with these global emergencies. The economics discipline has provided the most influential framework for thinking about public policies, but it has proved inadequate, both in preparing for the current emergency and for dealing with it. The pandemic underlines the necessity for a rethinking of our received ideas about economics and points in some directions that this rethinking should take.
To me, pandemic economics is the study that seeks to investigate a global outbreak of disease, its effects on the national and international economies, with intentions to proffer best possible responses by government (and private) instruments towards ensuring public health and enhancing the flow of economic activities before, during and after an outbreak.
Unlike Wartime economics, the economy has not been leveled by bombs—it has simply be turned off. There is no much loss in capital.
WHAT SHOULD INFORM GOVERNMENT DECISION ON CURRENT SHUTDOWN?
GDP GROWTH OR PUBLIC HEALTH
“The COVID-19 pandemic is, first and foremost, a health crisis. However, it is rapidly becoming an economic one too”, says Martin McKee & David Stuckler of Nature Medicine. Economists are sharply divided on which approach to adopt in dealing with the trade-off between economic activity and public health.
Public health advocates posit that this is not an economic crisis but a health-care crisis. “In an economic crisis, you could imagine a situation in which people lose their jobs and are unable to spend money. That’s called a demand shock, which is what happened during the global financial crisis of 2008. Or producers could raise prices (for various reasons), making it harder to buy their goods. That’s a supply shock, and it describes the oil crises of 1973 and 1979. But what is happening now cannot be addressed primarily by economic responses, because we are witnessing the suspension of economics itself”, says Fareed Zakaria of Washington Post. According to Zakaria, “Today, even if you have money, increasingly you cannot go into a shop, restaurant, theater, sports arena or mall because those places are closed. If you own a factory that hasn’t already closed for health reasons, you may still have to shut it down because you can’t get key components from suppliers or you can’t find enough stores open to sell your goods. In these conditions, cash to consumers cannot jump-start consumption. Relief to producers will not jump-start production. This problem is on a level different and far greater than the recession of 2008 or the aftermath of 9/11. If it were to go on for months, it could look worse than the Great Depression.”