Today, we interview two world-class economists. Richard Easterlin, the recognized founder of well-being economics, suggests NZ got its Covid-19 response right:
“If you look at the concerns that are most important for people’s wellbeing, it's three things: their job, family circumstances and their health. The NZ approach involved a composite of attention to health and a job. So the wage subsidy, income support for the people that did lose their jobs … meant people did not suffer nearly as much as they otherwise would have”.
Ananish Chaudhuri, Professor of economics at the University of Auckland and a visiting Professor at the Kennedy School of Government at Harvard University, has a different view:
“The Oxford University Blavatnik School of Government has a measure of this thing that they call the policy stringency index and according to them, the three countries that had implemented the most stringent policies were NZ, Israel and India. But surprisingly there is very little evidence to suggest that there is a strong correlation between the stringency index and number of infections or deaths”.
“There didn’t seem to be a lot of consideration of the costs and benefits … So very often, we get excessively focused on preventing deaths that are right in front of our eyes but in doing so we completely ignored the fact that that action may be creating more havoc elsewhere”.
“The government seemed to be taking a lot of advice from the epidemiologists whose view seemed to be that we are going to prevent COVID deaths no matter what. But in doing so they were completely ignoring the fact that their policies would lead to massive loss of lives, livelihoods, etc, in other areas”.