Hi Fintech futurists -- I hope that you and yours are OK, socially distanced and stocked on essentials. Whether you feel it yet or not in daily life, the world is bracing for coronovirus impact. In this week's analysis, I look at the difficult trade-offs between health and economy, and try to quantify the impact of the likely slow-down. We look at some grim but useful concepts, like (1) the value of a statistical life, (2) what happened to the Soviet economy and life expectancy after perestroika, and (3) how our financial machines (NYSE, Robinhood, Maker DAO) are cracking at the edges. If you can do one thing -- be kind and gracious with each other as some things inevitably break.
Great article. The thing that is fascinating/scary about this is how it's seizing markets in every country. It's like the entire global economy pushed the pause button for the next 2-3 months. I personally think every bank account in the US should get $10,000 airdropped into the account, and perhaps more in the future. Right now deflation is the enemy.
Loved the article. The value of a statistical life is a useful Concept, but in my mind it has the same limitations of measurement like natural landscapes have. Valuation models have to rely on datasets where a clear market value can be assigned. Total value of life (let's assume stochastic) is ultimately value against the earning potential of that life. Just like for the Environment, total economic valuation covers all the earnings streams available to, say, a Woodland or parkland… without more directly visible correlations with other economic phenomena, it is difficult to assign any weights to other measures - say, destruction of parkland somewhere causes a minor crash in a stock market nearby because all those employed there tried to go into more liquid assets immediately.
In a way, Coronavirus is a great example of cascading effects - its dark, macabre productivity is not only in the People it kills, it is also that it has set many other balls rolling.
I particualrly like your choice of some proxies, including court Awards on wrongful deaths. But economic valuation of life is tricky.
I do agree with your general Message though. Great article!
Great article. The thing that is fascinating/scary about this is how it's seizing markets in every country. It's like the entire global economy pushed the pause button for the next 2-3 months. I personally think every bank account in the US should get $10,000 airdropped into the account, and perhaps more in the future. Right now deflation is the enemy.
Loved the article. The value of a statistical life is a useful Concept, but in my mind it has the same limitations of measurement like natural landscapes have. Valuation models have to rely on datasets where a clear market value can be assigned. Total value of life (let's assume stochastic) is ultimately value against the earning potential of that life. Just like for the Environment, total economic valuation covers all the earnings streams available to, say, a Woodland or parkland… without more directly visible correlations with other economic phenomena, it is difficult to assign any weights to other measures - say, destruction of parkland somewhere causes a minor crash in a stock market nearby because all those employed there tried to go into more liquid assets immediately.
In a way, Coronavirus is a great example of cascading effects - its dark, macabre productivity is not only in the People it kills, it is also that it has set many other balls rolling.
I particualrly like your choice of some proxies, including court Awards on wrongful deaths. But economic valuation of life is tricky.
I do agree with your general Message though. Great article!