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Real options and social distancing

Summary:
I missed this when it first came out: We think that the debate regarding extreme social distancing has a clear verdict — it is imperative that we should engage in this social distancing (shelter in place for all but essential workers) at least for the foreseeable short-term, but for reasons that both sides have missed. Our country does not need to decide today whether it is worth shutting down the economy for a prolonged period to protect against coronavirus. Instead, we only need to decide what to do for now. And for now, the health benefits of extreme social distancing clearly exceed the costs to the economy regardless of your chosen economic model. To understand this, it is critical to appreciate the concept of real options. Recommended.

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I missed this when it first came out:

We think that the debate regarding extreme social distancing has a clear verdict — it is imperative that we should engage in this social distancing (shelter in place for all but essential workers) at least for the foreseeable short-term, but for reasons that both sides have missed.

Our country does not need to decide today whether it is worth shutting down the economy for a prolonged period to protect against coronavirus. Instead, we only need to decide what to do for now. And for now, the health benefits of extreme social distancing clearly exceed the costs to the economy regardless of your chosen economic model. To understand this, it is critical to appreciate the concept of real options.

Recommended.

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