Econ 3.0? What economists can contribute to (and learn from) the pandemic

For evidence that mainstream economists are taking the challenge of covid-19 seriously, look no further than the comments of Gabriela Ramos, chief of staff at the OECD, at a conference in April: “For many institutions, including the OECD, which has traditionally emphasized the need for efficiency, it is not easy to accept that we should build slack, buffers, and spare capacity into our systems…but as we now see this is literally a question of life or death.”

This is the first plank of the profession’s response to the pandemic: questioning whether national economies, individual companies, and markets should be optimized to maximize return on capital, or to ensure resilience in the face of a crisis. 

The second clear trend concerns methodology and a willingness for economists to move away from strict mathematical models. “The pandemic has, in many cases, decreased our reliance on traditional economic metrics such as GDP,” says

Read More