Economic Activity and the Value of Medical Innovation during a Pandemic

Casey Mulligan

No 27060, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The “shutdown” economy of April 2020 is compared to a normally functioning economy both in terms of market and nonmarket activities. Three novel methods and data indicate that the shutdown puts market production 25-28 percent below normal in the short run. At an annual rate, the shutdown is costing $7 trillion, or about $15,000 per household per quarter. Employment already fell 28 million by early April 2020. These costs indicate, among other things, the value of innovation in both health and general business sectors that can accelerate the time when normal activity resumes.

JEL-codes: E01 I18 O31 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-gen, nep-hea and nep-mac
Note: EFG EH PE
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Citations: View citations in EconPapers (20)

Published as Casey B. Mulligan, 2021. "Economic Activity and the Value of Medical Innovation during a Pandemic," Journal of Benefit-Cost Analysis, vol 12(3), pages 420-440.

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