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The coronavirus lockdown has led the world’s economy to the edge of total collapse. Even the most optimistic now agree we are hurtling towards the deepest recession in living memory. But despite governments playing a critical role in propping-up creaking economies, an eminent economist believes the economy must play an important role in fighting the virus.
Professor Andrew McAfee, a principal research scientist at MIT, thinks “the market” working in tandem with public bodies can achieve accelerated results.
Markets have very important roles to play in the fight against the coronavirus
Professor Andrew McAfee
He believes the first role private enterprise can play is the scaling-up of vital protective equipment.
He told Express.co.uk: “I do not think purely market mechanisms are going to work to get this virus under control.
“However, markets have very important roles to play in the fight against the coronavirus.
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“One of them is to produce the masks and the Personal Protection Equipment (PPE) we need.
“We need everything from disinfectant wipes, to masks and protective equipment for frontline workers very quickly.
“And I do not want to try to invent a command and control economy to manufacture and distribute all of those things.
“I think the market has demonstrated that it’s pretty good at that.”
The economist also believes the profit incentive is a powerful motivation for R&D.
Professor McAfee said: “I also think that we can put some pretty high-powered incentives in place to reward successful vaccine manufacturers, for example.
“And this is a great example of a public and private partnership, where the government will say ‘we will commit to buying a huge quantity of a vaccine that meets the following tests’.
And that can provide ample incentive for pharmaceutical companies to join the race to find the vaccine.”
The digital economy expert also argues the long-term economic outlook is inevitably married to effective public health measures.
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He said: “There are lots of variables here and lots of unknown factors – we’ve never seen this before in the modern economy, so I really don’t know this [economic crisis] will last.
“That said a decade sounds long to me and months sound short to me.
“I think the economic impact is not divorced from the public health impact.
“What I mean by that is if we ease-up on the lockdown too quickly, and try to return to businesses normal without a very effective testing regime in place, and without a broadly-available vaccine, I’m pretty sure what’s going to happen is that a number of people are going to become infected, because they’re not practising social distancing.
“And that will frighten other people, who are unwilling to go back to their pre virus, economic lives.
“So we’ve kind of got the worst of both worlds; we’ve got a recession that keeps dragging on, and we’ve got a virus that keeps getting a lot of people sick.
“So the recession will be shorter once we put extremely effective public health measures in place.
“I’m really not sure how quickly the recession will last if we don’t put very effective public health measures in place.”
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