Do COVID-19 restrictions really hurt NC’s economy? We’re about to learn more
Despite months of intense scrutiny by some of the world’s brightest people, much about COVID-19 remains a riddle.
A lack of answers on the medical side is understandable, since the subject is a new coronavirus, but the knowledge gap also is found on the pandemic’s economic side. No one seems to know just how – and how deeply – COVID-19 is hurting the economy and what is the best course to buffer the damage. Some of the uncertainty reflects the effect of government aid and what will happen when it ends.
That economic haziness is one reason Gov. Roy Cooper has moved cautiously toward lifting restrictions on some businesses. It’s not clear whether allowing more businesses to open, or to open fully, will generate enough economic gain to justify the increased risk of infection.
Republican state lawmakers have no such worries. They’ve passed a slew of bills trying to open businesses including bars, gyms and bowling alleys, and on Wednesday, they unsuccessfully attempted to override the governor’s vetoes on those bills. They think that overzealous safety precautions are holding back the economy and causing health issues of their own, such as substance abuse and mental stress related to unemployment and business losses. But the experience of states that did quickly reopen shows that lifting restrictions can cause infections to spike in a way that dampens economic activity.
Now professors at UNC Kenan-Flagler Business School and a unit within the school, the Kenan Institute of Private Enterprise, are trying to shed light on how the pandemic is shaping the economic landscape in North Carolina and how public policy should respond.
They correctly argue that what’s needed is what’s missing – robust, detailed data about what’s happening on the health side as well as the economic side of the pandemic.
Greg Brown, a finance professor and director of the Kenan Institute of Private Enterprise, told the editorial board, “It feels like the conversation has been dominated by perhaps too narrow a view of just what’s happening on the health side and less of an understanding in terms of what the broader economic impact is.”
Brown and UNC business Professor Christian Lundblad are urging public health officials to provide more information about whom COVID-19 is affecting and where.
Brown said that clearer viewwould allow for regional rather than statewide restrictions on businesses.
Lundblad said, “Our objective is to bring to the table a more holistic perspective on how to evaluate decision like this. I don’t think we can look at case counts in isolation.”
To support a more nuanced approach to economic policy in a pandemic, the UNC Kenan Institute of Private Enterprise is joining with business leaders in the North Carolina CEO Leadership Forum to create a data dashboard for tracking the economy.
The dashboard – a kind of economic counterpart to the state’s dashboard on COVID-19 health effects – will give a sharper picture of how the state’s economy is faring in terms of income and spending. It will also measure what may be the most important economic indicator – a “consumer consternation index.” The index will track “the reluctance or inability of individuals to conduct non-essential activities away from home.”
“At the end of the day, people have to feel good about walking into a store again,” Lundblad said. “Firms themselves are going to have to make investments in making their customers and workers feel protected as well as actually being protected.”
The professors are on to something. The less people know, the more they fear. More and better information won’t end the pandemic, but it will help people navigate a pandemic economy.
This story was originally published July 9, 2020 at 12:00 AM with the headline "Do COVID-19 restrictions really hurt NC’s economy? We’re about to learn more."