Flattening the COVID-19 Curve in Developing Countries
The more contained you want the novel coronavirus to be, the more you will need to lock down your country – and the more fiscal space you will require to mitigate the deeper recession that will result. The problem for most of the Global South is that policymakers lack fiscal space even in the best of times.
LEE, MASSACHUSETTS – COVID-19 is ravaging advanced economies such as Italy, France, Spain, and the United States. Beyond the deaths and human suffering, markets are discounting a catastrophic recession accompanied by massive defaults, as expressed in the radical repricing of corporate credit risk by financial markets.
As horrific as this sounds, the situation in the advanced economies is likely to be much more benign than what developing countries are facing, not only in terms of the disease burden, but also in terms of the economic devastation they will face. And while two academic communities – public-health experts and macroeconomists – are starting to talk to each other, unfortunately the conversation has mostly involved only the advanced countries.
The public health community has made the differential equations that govern contagion almost mainstream. People now talk about the role of the R0 factor (the average number of new infections caused by each infected person) and about the need to flatten the contagion curve through social distancing and lockdowns.