I’m DR. LISA KENNEDY. I’m a Chief Economist specializing in health economics. I’ve been helping the media report on the COVID-19 crisis, in relation to the impact on our global economy. Ask Me Anything!

Is it true that goverment wants us to stay home so they could change batteries in birds?

Yeah definitely - I think a 'bird' is watching me right now!

-Will the housing market crash? Namely vacation towns (asheville nc)

-will the SP 500 go lower?

-when will the economy bounce back? Considering this will likely throw it in the recession if it hasn’t already

We don't know if the housing market will crash yet. It is early days in this health crisis. Extremely likely that the SP 500 go lower - we are for a white knuckle ride. As far as when will the economy bounce back, I think we can say it won't be as long as we could imagine or as short as we'd like. So essentially, we could see several quarters of economic contraction before we see expansion again - basically we have to get through this until we can contain it or find viable treatments and preventative measures

Governments all over the world are starting to provide huge amounts of money to businesses to prevent bankruptcies. What are the long-term economic downsides of this free money?

We have around 22-23.3 trillion in government debt in the US so this will increase that undoubtedly. Governments don't have as much 'fuel in the tank' in stimulating the economy - given the last recession - so this is going hit them. Historically, shocks to the economy result in higher tax rates - so some folks will definitely see this - take World War 2 - around 94% rate on income over 200,000. Also expect austerity packages after this economic shock has passed.

Hi Dr. Kennedy,

Do you think that a relief check of $1000 to each household in America is a good idea? Why or why not? (Sorry this sounds like a terrible exam question). Thank you for taking the time to do this!

Adding to this question..Would it be more beneficial for the government to pay person’s mortgages/rent, utilities, and food based on family size until this gets under control? Or not shut off or evict and add missed payments to the end interest free. If not, how does 1000$ help people if they don’t have basic utilities?

That's a great question. I suspect that the $1000 is possibly the fastest way the government can get money in the hands of those who need it then perhaps after that there can be efforts to address food, utilities, rent issues. The more complex the solution, the harder and more lengthy in time it is to administer.

Is there a point where the lives potentially saved by the quarantines and closures begin to cost lives due to the ensuing economic hardships?

My mom asked me the same question over the weekend. I think that the answer is that if we don't act now, we could lose an entire generation of folks over 70 as well as a number of people who have vulnerable conditions. With no immunity - we could see this virus plow through our communities and overwhelm our healthsystem/ICU's. This is completely unprecedented - we won't just be changed economically in 2022 but also there is likelihood that we will all know someone who died of this.

Is there a chance that universal basic income will become the new normal?

Right now we have a stimulus package of something like 850 billion and the possibility of $1000 for every adult. Maybe not universal basic income yet - but with consumer credit at an all time high at around 14B - we can't hold on very long and the government will need to stretch to help us.

Question about this. Is this money meant to be spent at retailers and such to help "stimulate" the economy or is this meant to cover bills? I feel like if it's the later it's not enough. Has there been any talk about suspending or waving mortgage/rent/car payments for the next couple of months? We're fortunate enough to have a little savings to cover us for the time being but so many Americans live paycheck to paycheck and $1000 won't cover the rent alone.

There has been some discussion about waiving mortgage and other payments - people are REALLY going to need this - so yeah - right now it's keeping people afloat who need it.

Can you give us some future scenario of economic impact this world health crisis will bring? One month, six months, one year, three years, five years?

From which past experience of a health crisis can you base these future predictions?

We don't really have that much experience in facing health crises in this way - it's unprecedented. What we can see 1 month is a significant contraction. So expect about less than 1% GDP growth for the world economy in 2020 and in the US - Q1: 0% growth and something like 0.4% growth (down from 1.2%). In three and five years we should see a recovery - but it is going to change a lot of how we do business. We might see transformation of entire industries like air travel, hotels, etc. Some businesses who can't hang on over the next 18 months and don't get some support in terms of loans or cash - could close their doors forever.

Is there significant risk that progressively multiplying secondary effects (worker protests, border restrictions, changes in consumer behaviors) will threaten the infrastructure of food production and delivery or other services considered truly essential? The official response in many countries has been to minimize issues, then react as if the steady progression of consequences was unexpected. Is there a reason to believe that official statements about the basic security of food supply and other necessities are not just as much products of public relations as the misleading statements made about the earlier stage of the viral outbreak?

In other words, the governments didn't tell the truth about the likely spread and consequences of covid19 being minimal. Why should we believe their statements about the food supply chain being fine?

We have no reason to believe that the food supply will be interrupted (that much). There may be shortages / 'bumps in the road' but nothing we can't contend with. (although I am running low on toilet paper...)

Thanks, and by the way, "Endurance" is one of my favorite books also. If there was more of Shackleton's courage and leadership in many of our current leaders, things would have gone very differently I think. Hopefully getting through this won't be quite as grueling as survival on the ice.

Totally agree newcraftie - I couldn't say it better!

When do you expect us to start seeing some of the more impacted companies close shop? I mean how long can an airline company survive when no one is flying? Anything in the tourism industry has to be dying right now? What happens to countries that rely heavily on tourism or other sectors that are heavily impacted?

Well, we are a very small amount of this starting now. Big hotel chains are reaching out now for credit. Airlines are seeking support from government rescue packages. Some companies are seeing significant expenses: plus they have corporate debt that also needs to be serviced and this is on top of all their other expenses that they are incurring when they don't have much (or in some cases anything) coming in. So it is dependent on what the government stimulus package looks like, what credit they can secure, how much debt a company is carrying, what their savings are looking like, and what their running expenses are. Companies will try to hold on as long as they can but this might mean that those who were already suffering before this shock will shutter very quickly (e.g., 1-2 months), some will last 4-6 months and then others could last longer. Governments will try to bail out these companies: we want to avoid permanent change to these industries - so for example - we're all going to need to fly when this is over so it is unthinkable that airlines go out of business.

Estimated impact on wealth inequality?

We saw a slight improvement in wealth inequality (a thing called the GINI coefficient) recently -but this will likely increase wealth inequality - there are already job losses that we're seeing.

Inflation also causes wealth inequality but I’m sure you already know that

Yes that's a great point on inflation.

Will there be so much pent up demand that when this settles down we might expect a big boom in activities like dining out and traveling?

Yes definitely - there will be a lot of pent up demand. But then there will also be people who are really hurting financially depending on what industry they were in - so they'll not be in a position to travel, dine out as much.

Is now "the time to buy" like people have been telling me?

The markets have taken a beating and there is a bit of panic sell-off. But that would depend on your current situation - I wouldn't recommend my aging parents to invest their savings in this environment. But for long term investors, this may be a good time to buy - but we might see a further drop in the market. It's really a white knuckle ride for everyone.

What can a Government stimulus plan actually do to reduce the chances of a long-term recession? Won't it be useless with nobody going out and spending money?

You're right ChodeMcGee - this is a supply-side problem as well as demand - but here is the way government stimulus could help. Affected business like hotel chains and those in tourism are just seeing all their bookings wiped out in days. But they still have rent to pay, debt to service and salaries for those who work for them. What is also important is that in these types of environments, both big and small businesses need cash to get through this crisis but liquidity – as ability to borrow starts to dry up – it’s hard to get a loan in this environment. This is why the government stimulus package is so important.

Is there a chance the us will nationalize healthcare/pharmaceuticals during the crisis? Would that even help?

It's unlikely that they will nationalize healthcare/pharmaceuticals but forced licensing is not impossible. With all these areas - it's about achieving balance and accelerating prevention and treatment options without having an indelible and irreversible impact on some of theses economies.

Are you as disappointed on how people have panic hoarded as much as I am?

Couldn't buy any meat, meds, bread, TP, cleaning products or soda today. Just a small, typical shop in the hope of resuming normality....

Yes, the panic buying is really difficult. I keep thinking that it will calm down but it keeps on going. And the toilet paper thing - I just don't get that.

What is mortality rate of the virus?

if you look at WHO data - there are huge variations: China: 3.9%, Italy 8.90%, US: 1.7%

Answered lower down under u/Hoochabald5 's comment

Thanks MintKitty

How quickly will businesses be back up to operate after this high level of social distancing?

It would depend on the industry. As an example our staff can resume work the same day after social distancing ends, but other industries with more complex supply chains will take far longer to function normally.

As per you, what would be the smartest start up idea post the Covid 19 emergency ? What industry would you advice a woman to invest in post this ?

For start-up ideas - I'd recommend - https://www.hhs.gov/about/news/2020/03/06/hhs-solicits-proposals-for-development-of-medical-products-for-novel-coronavirus.html Also, we're going so huge demand in completely different pockets of industry - e.g., healthcare infrastructure and anything that facilitates home / remote activities.

How necessary are bailouts to large, multibillion dollar corporations such as the airlines? Would it benefit the economy more to instead direct those funds as a stimulus package to Americans who are impacted by this crisis?

I think it requires both - support of corporations and Americans impacted by the crisis. This week around 45,000 Ohio workers applied for unemployment and we saw around 15K apply in New Jersey. Part of this is a result of corporations (who remember have around 10 trillion in debt) are also struggling and this then impacts individuals. Also - the airlines/aerospace industry was already struggling before this -Boeing's 737 Max is produced in conjunction with 600 other suppliers even without this - so we were already going to see something like a Q1 GDP impact just from Boeing of 0.5%

What do you think will be the long-term impact of this pandemic on the healthcare system in general?

We're already seeing huge gaps in the healthcare system. Hopefully we will learn and improve the system. We're also going to see a lot more training and infrastructure that will help this. The infrastructure in some parts of the healthcare system will be massive. But we'll also see a vacuum on other parts of healthcare as covid-19 dominates everything. For funding of innovations - We need to find a way to fund innovations so that we are not in the same situation when something like this comes around. I think that this shows that funding and accessibilities for innovations in states of emergency are no adequate.

Theoretically, assuming 2% of the entire US population passes away (with a large chunk being the elderly). What economical impacts would follow? Unemployment rates, social security, etc

Wow I really, really, really hope that we don't lose 2% of the population. I worry every day about my parents - I think many of us do. As far as the impact on the economy - that would be an excruciating and terrible scenario. One of the things that you have to also consider is consumer confidence - sad and stressed people - echoing across the economy. This is why we need to act now to avoid this.

Also- every person on earth is thinking about this virus - hopefully with ingenuity we can find new treatments. We are already seeing some promising treatments, vaccine trial started -so there is a ray of sunlight in this dark storm.

Dr. Kennedy -

In lamens terms, can you relate the impact that those of us will see to retirement savings, specifically Roth IRAs?

Thanks very much for your insight!

Yes - expect a big initial fall in retirement savings/IRAs - those at least based on stock investments/index trackers (most of them are to some extent) which should hopefully recover in the next 24 months. My advice (which I should take myself) don't look at your retirement account just now - it will recover over time.

How long do you expect this quarantine/hide in your house/don't go out to last? The company I work for cannot close completely because we would all lose our benefits, so they have staffing down to a skeleton crew and I am one of the unlucky ones sent home for at least 3 weeks with no pay. Why so long a timeframe for many places if the recommended quarantine period is only 14 days? I understand the need for high risk people to keep themselves home, and for those that are infected or may have come in contact with an infected person to stay home, but when does it end? Why can't healthy people be able to go about business as usual, being extra cautious and still clean and careful? I am the sole provider for our household, and now we have to totally replan our next few months.

Also thank you, for the AMA and for the hard work that you do.

Thanks for your kind note ADarkDraconis. To start - I'd like to say that it's really, really tough to be home for 3 weeks without pay. More and more people are saying that this is happening to them. The answer to your question is a difficult one: our healthcare system doesn't test everyone so we don't know where the virus is spreading. It also doesn't test for antibodies so we don't know who has had it, is now testing negative and can go about their work. All we've really seen is how this virus has unfolded in other countries - and now we're seeing outbreaks in the US- one of the most concerning being New York. Also what we're seeing now is virus transmission maybe 2-3 weeks ago. So having people 'shelter in place' today should give us time to see where the virus is and caseload in another 2-3 weeks - so to say it differently -we don't want to find out in a month that we're in an epidemic given that the a virus that can transform a country (e.g., Italy) in a 3 week period. Italy only locked down around a week ago. Italy had around the same number of cases we did about 10 or 11 days ago - and now they have around 35,000 cases. I'm so sorry to say that time is not on our side with this virus- it moves faster than we can adjust. Also, there isn't that much data out there but if we look at some places where everyone has been tested (e.g., Diamond Princess at least at time of testing), a significant portion of people are asymptommatic - so the concern is that there could be a spread and then once the virus gets into the elderly -we could lose a generation of people.

Thank you!

How many mortality rates are there?

I’ve seen people cherry picking the data to either say we are overreacting or under reacting. Ive seen well respected epidemiologists say this is a gross mortality rate of .5%. I’ve seen numbers as high as 10%. It all depends on the denominator and assumptions of course but I’m losing the forest through the trees. I also realize these are gross numbers which need to be stratified. Just need a 101. What number do you use? Specifically what percentage of the population will catch this? 70%? Of that, what percentage will be asymptomatic versus symptomatic? Is it 80/20, 50/50? Assuming the mortality rate only applies to symptomatic, what percentage of that group will die? Take NYC for example. What do the models currently show.

I’m asking you impossible questions and I would seriously need to write a 20 page paper just to state all of the assumptions, etc. I’m only looking for rules of thumb. Politics are starting to skew the numbers - dependent upon what agenda folks have. I just want plan old boring empiricism.

Thank you!

These are impossible (and good questions). Everyone is trying to answer these. As you say - there is no good denominator. So we're frightened by Italian death rates and even more frightened by the age-related death rates - I seem to recall something in the area from one publication in Italy of 58% in people over 80 and this is very something like 14% case fatality rate in China (don't quote me as I'm not an epidemiologist). Either way you look at it - it's terrifying.

To add to this - if you look at WHO data - there are huge variations: China: 3.9%, Italy 8.90%, US: 1.7% (then there are the rates of the Diamond Princess where they tested everyone - which is lower)

Exactly! Plus there are ranges in the date of initial incubation to death. I’ve read papers where it can go from 25 days total to 47 days. Of that 10 days in the hospital. Horrible source but if you scroll through Twitter so many seem to be an the initial onset of symptoms or have been experiencing them for a few days. Large number complain of lung pain / weird feeling in chest. They (most) don’t meet cdc criterion for testing. So if this group is any indication of what’s to come, and going with the higher number (37 days till hospitalization) we should see the first wave next week. This will last for a month or two and come down assuming everyday stays in place. Again, we have no idea who is presently in the q who have yet to be admitted. My fear is that this number is extraordinarily high. Such a vicious virus. I feel all of my responses are so inadequate - we just don’t know if this will be Armageddon, really bad, bad but manageable, etc. anyone who claims to know this, well they are not being totally truthful.

Thank you so much for your work. You have an impossible job. Unsolicited advice. Err on the side of worst case given our lack of testing / Italy. You’ll be forgiven for being conservative. Downplaying the risk based on incomplete data (which I’ve seen some do by cherry picking data, not taking the trouble to analyze this and admit they just don’t know for sure, that’s irresponsible.)

Thanks so much Hoochabald5 for your comments - you've clearly studied this really carefully. I have to agree that what we're seeing in the hospitals today is a reflection of what was happening 2-4 weeks ago related to the spread of the virus (which we really know very little about). And we're so blind in not knowing where this risk is. Plus the NEJM article yesterday on how long the virus stays in the air is enough to given anyone pause. So what we're doing today in terms of healthcare measures/lock-down - we should see the effects in another 4 weeks. I'm stunned every day when I look at the growth in infections.

Can you catch it more than once?

We don't really know yet - we've only really seen and studied this virus for 11 weeks - so we make assumptions based on what we know about other infectious disease - but hopefully not.

Is COVID-19 worse than the flu?

Yes: https://www.reddit.com/r/coolguides/comments/ffulmm/cold_vs_flu_vs_covid19/

How bad will the effects of the corona virus have on the global economy?

Pretty bad in the short term but hopefully we'll see recovery in the long-term. We can expect a recession unless something miraculous appears (a treatment or discovery - which isn't impossible) What we want is to prevent industries from closing their doors and the job loss associated with this. We want to be sure that people in the 'gig' economy have enough to eat and pay their bills why we wait this out. This is a totally different kind of economic shocks - if we can hang on for a year to 18 months we can come out of this. The more we do today economically and from a health perspective - the more lives we can save and equally the more people's livelihoods we can preserve.

I have late May concert tickets as a surprise birthday present for my partner. Do I need to get a new gift?

I think it might be likely.

Do you think this COVID-19 pandemic makes a case for universal healthcare?

Well there are cases where those who have more integrated healthcare (e.g., social health insurance versus universal) -where healthcare is more coordinated - that allows for a faster and more coordinated response! Having also lived in the UK and the Netherlands - Universal/social healthcare has its strengths and weaknesses - it can depend on its execution.

According to you which countries are leading from above list, when it comes to fighting corona. i'm not talking about propaganda of media. i am asking about ground info. can you share your opnion on this?

It's really too early to tell - but from at least the data, it looks as though Singapore, S. Korea and China have had some success in containment. (Now we can't see everything with this virus -both through bias in how the virus is reported about and what level of testing is happening.) The other thing is that these countries been fighting this for longer - we can't see what is happing in - say - other countries like Europe (with the exception of Italy) as they're just being affect now. So time well tell.

While Covid-19 continues to be spread, why are so many businesses still open? Sure many are isolating themselves after work hours, but work places often have hundreds or more employees working together. It's absolutely ridiculous that we are considering profit more important than people's health. The spread is only going to get worse and more widespread, I guarantee it.

This is a good question. This shock and the speed of infection is like nothing we've ever seen. Some people are still getting used to it - hopefully most businesses are sending their workers home who aren't essential to the support of communities. The sad thing also is that we can't gauge community spread because we don't have our testing capabilities up - so it isn't impossible that some communities today should be in complete lock down that aren't and others that are- have gone into lock-down too early. We just don't know and so to your point, the prudent thing is to take every step towards saving lives and reducing the spread.

Is there still a potential scenario where we could see this economic crisis end swiftly, world economies bounce back into bull territory, and have things return to normal within this year? Maybe in a scenario where they find a cure or an easy way to keep it from being deadly in the next few weeks. Or is the damage too big at this point to be able to get back to normal within this year, even if the Corona virus threat ends?

Yes definitely an optimistic scenario is possible (and I personally hope we find one) - e.g., we learn something about the virus that helps us contain it, are able to re-purpose a treatment for it that works really well to treat it. So yes -if we could do this now, it would end the economic crisis - but it needs to happen really, really fast as that's how quickly the virus moves.

Will the world wide economic system collapse?

Man I hope not! I think we're far from that - however there will be countries that really struggle. This is a unilateral shock to our economy - if we're smart we can get through it - but we need to take the steps to 'treat' those area of the market that are sick and keep them going until this shock passes.

There is a huge government interest in mental healthcare. What impacts in the mental health market do you foresee?

That's such a great question. Collectively we are all scared about this virus - we're facing into the unknown. It's even harder for folks who have behavioral health conditions or opioid use disorders. One significant impact is how folks with mental healthcare can get care. This is where telemedicine could be impactful. The other area is covid-19 is like a vacuum on the current healthcare infrastructure - everything is going towards covid-19 so folks with mental healthcare issues could get less optimal care.

What are the chances this will send us into a depression similar in scale to the 1930's?

At this point a depression (that is a really, really severe recession) is unlikely - we just need to get through the next 12-18 months and hold on. We need stimulus packages and available credit to do this - so there is significant onus on the government to help. We were in an historical expansion- e.g., the economy although vulnerable were strong - so hopefully we see things improve after this shock recedes.

Shouldn't we stop calling them "stimulus" packages? They're not meant to kick start the economy like traditional stimulus - they're really meant as tide over funds to keep people in their homes, keep businesses afloat until we get through this issue right?

Yes I had the same thought myself when I was reading the news this morning - What's a better name for these - 'keep us afloat' packages?

Compare the early fallout from this thing so far to the beginnings of 2008, the Great Depression, or 1987 Black Friday.

Spoiler alert: it’s already much worse 🙁

It's faster as a shock but it's a different shock. In some places it's a near dead-stop on the economy however, it's not because of issues with the general economy which all lead indicators were previously looking good - so the underlying economy was looking okay before this shock - so it is possible that new could get out of it quickly provided we can keep those businesses suffering now on oxygen.

Are you related to JFK?

haha - no - it is the Scottish arm of the Kennedy's

How do you think potential quarantines like the one in Italy and and SF are going to affect the retail and entertainment market? And a follow up, do you expect these shelter-in-place orders to sweep large cities across the nation?

The 'shelter in place' quarantines are sooooo devastating for retail and entertainment - they will decimate these industries. As far as other cities - it's highly likely that we'll see lock down in more and more cities - and also - we could see 'start-stop' lock downs that could make this go on for a while.

Hello Lisa,

I guess this crisis will emphasize the need for e-health. Considering how many people are crowd working and the beginning of real hands on telemedecine. But do you have ideas why we postponed solutions for years? I'm not sure it's just a matter of doctors willing to keep some eye to eye diagnosis.

The reason for the delay with telemedicine has been due to a myriad of factors. The most oft cited cause has been due Traditional Medicare limiting telehealth to rural settings. Medicare Advantage plans are now allowed to offer basic telehealth services in the Spring of 2019. Given that Medicare is the largest payor in the United States, changes in their policy towards telehealth and the reimbursement for those services play a large role in the adoption of telehealth.

We have seen stimulus packages deployed for various industries, but we have not yet had a comprehensive stimulus deployed for every individual citizen like the ones currently being proposed. What do you think would be the most significant economic impacts of providing ~$1,000/mo. to every American adult during this crisis?

The economic impact of $1000/mo (if this could be sustained by the government) for Americans would certainly impact consumers positivity and help ensure those that are seeing their jobs at risk, those who have lost jobs and those that are seeing significant fall in their income - it would help them financially survive this shock -and we need them to survive this. However, it wouldn't fix the supply-side shocks that we're seeing and it wouldn't likely get people spending.

Are central banks all going to start printing money leading to runaway inflation?

Yeah - We'll need to find balance in fiscal policy because there is always the concern that it can lead to inflation. We've seen some weird things in monetary policy lately where we can't link employment rates directly to inflation. We should see some inflation in some pockets of industry/ products due to supply issues - maybe in the next couple of months. On the other hand - we've seen oil prices drop by 56% and while this really hurts US suppliers - it also means that consumers could see prices falling when they fill up their tanks.

It’s wheelbarrow time!!

Yeah -we need a cash cannon.