What can a cruise ship tell us about COVID-19

The coronavirus (COVID-19) that is spreading through China is a tragedy, and I’d like to send my best wishes to those that are sick and my love to those who have passed on.

However, as yesterday’s quote noted – sometimes we need to temper our warm hearts with cold heads in order to understand social phenomenon and discover truths that lead to the improvement of society.  If we are interested in understanding the risks to a country associated with coronavirus, we need good information on how the virus spreads and the fatality rate, in order to set appropriate policy.   

In that way I’d like to talk about selection bias in the coronavirus figures – how this may overstate the death rate and understate the number of people catching it, and how the cruise ship – as well as being an incubator – may be (in part) a natural experiment which allows us to correct for this bias.  

As my economics PhD thesis consider health related questions, this is an issue I like to think through, and which I think is valuable.

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QOTD: What is economics?

From Twitter, but originally the Samuelson and Nordhaus text – based on a phrase from Alfred Marshall – is beautiful:


Manuscript untitled: Retirement income, tax, and NZ

As many of you know, I have done a lot of work on New Zealand’s retirement and tax systems in the last decade. I have been attracted to this issue because New Zealand has tax and retirement income systems which are now substantially different from those in most high income countries. 

Standard economic theory suggests many of the choices New Zealand has made impose disproportionately large costs on current and future young generations. Of course standard economic theory may be wrong. Nonetheless, when a country adopts a path that is different from standard economic theory and normal international practice, it suggests that the path should be carefully investigated to ensure it is in an appropriate direction.

To this end I am planning to write a monograph, serial fashion. Over the next few weeks i propose to write the thing a few pages at time (in between a very busy lecturing schedule in which I am teaching four courses) and post them on this blog. My thanks to Matt and Gulnara for giving me this opportunity. I am not sure how far I shall get, but all feedback is welcome.

Feedback from younger readers is especially welcome, for reasons that will soon be obvious.

Here is page 1 – the good bits version – or, at the moment, the only bits version.

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Inefficient gifting on Valentines Day

Today is Valentines Day! As a hopeless romantic it is one of my favourite days of the year, where I hope everyone experiences all the love in the world.

Matt is romantic – but he has his weird signalling view of presents.

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A decade without recession as monetary policy failure?

A post by Scott Sumner said that a decade of growth in the US wasn’t good enough – and was a monetary policy failure.  In New Zealand, we have had nearly a decade without a technical recession (the last one was the second half of 2010) – so has this been a monetary policy failure too?

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Regional NZ’s exposure to China shocks

It was interesting to see Gulnara’s post about the coronavirus and the potential implications for the New Zealand economy yesterday. In it she stated that – if we use SARS to understand any potential shock we need to correct for the way New Zealand’s relationship with China has evolved in the intervening years.

Given this we felt that it would be useful for us to share an article Brad Olsen wrote in February 2019 on regional New Zealand and China (which also helped inform Brad’s recent comments on the coronavirus here) – which may shed some light on this issue. The article can be found here, and is reproduced below.

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