Tuesday, March 17, 2020

ECONOMIC impacts of coronavirus challenge, and grossly inefficient choices

Many, many groups are saying that we all need to pull together and use all we have to prevent serious damage due to coronavirus impacts. It is clear that the economics impacts will be just as serious as the direct disease impacts.

This being so, I am amazed at the gap between the level of economic analysis I see coming from US and EU today versus what we were discussing on this list at the height of the 2008 crisis, drawing on what I learned at the Office of Energy Information Validation at EIA/DOE (where I handled model evaluation and later developing new models from 1979 to 1989, when I moved to NSF).

I certain remember how the best standard scalar macroeconbomic models generally had errors on a factor of two, and Jorgensen's famous DGEM had even worse, because of the complex structural effects of energy shocks, which we WERE able to understand with effort, though few others ever did. (The Stanford Energy Modeling Forum back then showcased the industrial energy demand model I developed using new approaches, improved hugely from DGEM and the Wharton Annual model, the best previous alternatives.) It sounds as if the same general KIND of structural\change (involving different industries of course and additional complications) is what is coming now, and the  various plans in US and EU are even less optimized and thought out than the least efficient plans of the 2008 era, and even less thought out than what Biden is ;proposing these days for climate. (Maybe less than one tenth the impact/cost ratio which a rational climate strategy would allow.) Since I was THERE in EPW during the 2009 failure... well, it scares me that we are on course now to replicating triple unnecessary failures, simply due to the growing gaps in communications between policy and reality in all these sectors. 

The Millennium Project got me invited to do two overviews on youtube (search on Werbos and "climate" or "AGI") aimed at trying to fill those life or death gaps in communications, but can you guess why my plans to go back to Korea this spring are on hold? And why sheer chaos and noise get in the way here?

But some of YOU may know better channels. if so, after retirement, I really just want to find ways to help SOMEHOW. 

Best of luck,

No comments:

Post a Comment