Paul Ormerod and Gerard Lyons

Why Sage needs economists

We do not need any further lockdown now and it should only be contemplated in the future as a last resort.

The economic case against lockdowns and severe government restrictions is strong. It is based on two key factors, one of which is continuously overlooked in the present debate. Yet, if we are to learn to live with Covid both merit consideration.

The first argument is one that is well understood: the cost of implementing restrictions. As we are seeing now, it hits certain sectors hard – such as hospitality and the creative sector – and has a wider economic impact, denting confidence. There is a significant fiscal cost too and large negative implications for many other aspects of health care, education especially for poor children, mental health and domestic abuse.

The second economic argument, though, is largely ignored. That is how to interpret the policy implications of the models provided by the epidemiologists.

The importance of this was reflected in the recent revelations in the Spectator about the approach to modelling by some of the government’s Sage advisors. This led to the suggestion that the epidemiologists were only factoring in poor outcomes in their modelling, and not a best-case scenario or the implications of no change in policy.

There runs the risk now of pitching some politicians as appearing to be in favour of the science, and others against

It would be like predicting the economic outlook by always expecting a recession, or worse. In which case, the government would be under constant pressure to change policy. Of course, occasionally, the economic modellers may be correct, and a recession would follow. But, over time, if they were to constantly predict such an outcome, their forecasts would be far too gloomy.

While this seems to be the case we are in with the projections made by some epidemiologists it would be unfair to levy criticism more widely.

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