Introduction and instructions

With these scenarios, I am trying to understand how the Covid situation can impact the economy and jobs. I am working to structure the information that comes in such a way that it makes sense and creates a picture rather than just being a stream of information.

The scenarios are not about questioning science or creating a view on how to fight the virus. I am much an economist, not an epidemiologist. I am interested in the impact. I am not interested in conspiracy theories.

No scenario is 100% correct and they are not predictions – the idea is to capture the range of possible outcomes rather than predict the future. So even when I say that we are trending toward chaos, I don’t mean that we are in or definitely in Chaos, but rather that we are going in that kind of direction. Based on how we are progressing we can choose how to change the trend or choose our responses.

I am posting this because it is such a live, fluid, conversation that I would love more input and observations. If you are reading this, please share your observations in the comments.

How this page is set up

I want to use comments and feedback to help refine the scenarios. I have never done this before, so it is an experiment. The way I am building these scenarios is with this central post giving an overview and then I will link to other posts describing in more depth the scenarios and uncertainties.

Please share your comments on any one of these pages and I will incorporate more thoughts and observations as time goes on.

I will eventually provide more information on how to use scenarios.

On to the Scenarios: The two primary uncertainties

I use these uncertainties to create the scenario axes, I use two main uncertainties one x-axis and one Y-axis, to create four broad scenarios.

I am working with these main uncertainties (follow the links to learn more and opine).

Y-Axis: Response efficacy

X-Axis: Virus severity

Click on the clink to read and opine.
I will be introducing more uncertainties, trends, and wildcards.

Initial Scenarios

Using these main uncertainties we end up with four scenarios:

Crisis averted: Effective Response and a Less Severe Virus (draft in progress)

Managed Crisis: Effective Response and a more Severe Virus (draft in progress)

Healthy Turmoil: Ineffective Response and a Less Severe Virus (draft in progress)

Chaos: Ineffective Response and a More Severe Virus (draft in progress)

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A Couple of days ago we seemed to be trending heavily toward chaos as of the 19th it seemed that there was more positive information. By the 20th, that seemed to shift again.

As a whole response was uncoordinated and focused exclusively on financial help rather than addressing health concerns.

It seems like we are still trending toward chaos but less so, with improvements to response and a possibly less severe virus.

As of March 20, what has changed:

Evidence that Virus severity may be diminishing:

• The situation seems to have improved after two days of no new cases of Covid19. Apple has reopened its stores in China. They were closed for a month.
• March 20: Fatality rate on the Cruise ships was much lower (Kristoff)
• This seems to suggest that a month to six weeks of social distancing may have a significantly positive impact.
• There is some suggestion that the virus does better in cold climates – so as we move into the Northern hemisphere spring that may impede the virus.

However

• Italy has a fatality rate of about 8% but their population skews older. (Germany has only had a 0.3% fatality rate.)

• However, the fatality rate may be less important than the hospitalization rate. France is reporting a 10% hospitalization rate and it has been higher in the US. The US doesn’t have enough beds for this and we are doing very little to increase beds.

Response efficacy may be increasing

• People seem to be respecting the order to stay separated, New York has managed to shut down completely (opinion).
• Federal government health support is still lacking and politicians are unable to demonstrate any leadership (opinion).
• Automakers offer to produce ventilators.
• Deblasio asks Elon Must to make ventilators.
  The lack of coordination here is disturbing, but at least there is a push to solve the ventilator problem. (Hospitals in the US have a grand total of about 172,600 of these machines).
• A 1000 bed hospital ship is on its way to New York.
• A trillion dollars of aid was approved, on the negative side this does not include much that will help against a virus but it does include a paid sick leave provision.

However,

• There was a report that the White House is purposefully not filling the leadership void in the interest of “small government”.
• The White House continues to try to hide information and focus more on market conditions than on solving the problem.
• There is already a shortage of medical equipment and masks and there is no coordinated response. (However, Honeywell and 3M are increasing production of masks).

A couple of strong wildcard contenders are emerging

• There is a vaccine trial underway in Seattle. (More)
• There is some evidence that Remdisvir may help with the disease.

Interesting but not sure of the relevance: