The Economic Perspective: “Psychological Impacts of the Virus”

Mary:  I’m Mary Walden, with economist MW, welcoming you to the economic perspective.   Today’s program looks at psychological impacts of the virus.  Mike, everyone is hoping for a cure, or vaccine, for the Covid-19 virus.   But once we get that, can we assume our economic behavior will return to where it was prior to the virus?

 

Mike:  Summary Answer

  • Unfortunately, economists who have studied this question say no
  • There will be some long run psychological impacts of the virus that will impact the economy
  • Specifically, for some time people will increase their probabilities of future viruses occurring
  • This means the future will be forecasted to not be a good as those forecasts were pre-virus
  • Means investments in the future will not be as strong, which will reduce economic productivity and investment returns
  • Means – even if the economy grows – the trajectory of growth will not be as strong
  • So we could be paying for the virus for decades
  • I’m MW

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.