Why Confidence in the Economy Matters During a Pandemic

NCMA

Dow Snaps 10-Day Rally as Consumer Confidence Declines

PRESENTED BY COLUMBIA BUSINESS SCHOOL

The cost of COVID-19 is as yet unmeasurable, but it is creating seismic disruptions that will be felt for a long time to come. First, and foremost, is the loss of lives. But there are also two components to the economic costs that should be addressed.

One component is the direct cost: sweeping business closures and higher health care expenditures. The second component, fear and mitigation policies, have accounted for the bulk of the costs so far.

Shuttering schools means many parents can’t work. Closing borders means business is interrupted. But it’s the human fear of exposure to the virus that has the potential to decimate the travel and entertainment sectors even when the pandemic has abated and airports and theaters have reopened.

office branding projectThis fear feeds on itself. If I am a provider of leisure goods and I expect that others will not buy my…

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