Table Of ContentPANDEMIC ECONOMICS
Pandemic Economics applies economic theory to the Covid-19 era, exploring the micro and
macro dimensions of the pre-pandemic, pandemic, and post-pandemic phases.
Using core economic tools such as marginal analysis, cost-benefit analysis, and opportunity
cost, this book explores the breadth of economic outcomes from the pandemic. It shows that
a tradeoff between public health and economic health led to widespread problems, including
virus infections and unemployment. Taking an international and comparative approach, the
book shows that because countries implemented different economic policies, interventions,
and timelines during the crisis, outcomes varied with respect to the extent of recession,
process of recovery, availability of medical equipment, public health, and additional waves
of the virus.
Pedagogical features are weaved throughout the text, including country case studies, key
terms, suggested further reading, and discussion questions for solo or group study. On top of
this, the book offers online supplements comprising PowerPoint slides, test questions, extra
case studies, and an instructor guide.
This textbook will be a valuable resource for advanced undergraduate and postgraduate
courses on pandemic economics, macroeconomics, health economics, public policy, and
related areas.
Thomas R. Sadler is Professor of Economics at Western Illinois University. He teaches courses
on Pandemic Economics, Energy Economics, and Environmental Economics. His research
focuses on environmental policy, professional sports leagues, and technological change.
PANDEMIC ECONOMICS
Thomas R. Sadler
First published 2022
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
52 Vanderbilt Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2022 Thomas R. Sadler
The right of Thomas R. Sadler to be identified as author of this work has been
asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in
any form or by any electronic, mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any information storage or
retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or registered
trademarks, and are used only for identification and explanation without intent to
infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Sadler, Thomas R., author.
Title: Pandemic economics/Thomas R. Sadler.
Description: Milton Park, Abingdon, Oxon; New York, NY: Routledge, 2021. |
Includes bibliographical references and index. |
Identifiers: LCCN 2021003147 (print) | LCCN 2021003148 (ebook) |
ISBN 9780367679774 (hardback) | ISBN 9780367679040 (paperback) |
ISBN 9781003133629 (ebook)
Subjects: LCSH: COVID-19 (Disease)–Economic aspects. | Economic history–21st century.
Classification: LCC HC59.3 .S23 2021 (print) | LCC HC59.3 (ebook) |
DDC 330.9–dc23
LC record available at https://lccn.loc.gov/2021003147
LC ebook record available at https://lccn.loc.gov/2021003148
ISBN: 978-0-367-67977-4 (hbk)
ISBN: 978-0-367-67904-0 (pbk)
ISBN: 978-1-003-13362-9 (ebk)
Typeset in Interstate
by Deanta Global Publishing Services, Chennai, India
Visit the Support Material: www .routledge .com /9780367679040
BRIEF CONTENTS
List of figures xix
List of tables xxii
Preface xxiii
Acknowledgments xxiv
An overview of the book xxv
Learning objectives xxvi
1 Introduction to pandemic economics 1
PART I
INVESTIGATION AND RECOGNITION 21
2 Economics of optimal disease control 23
3 Globalization, networks, and contagion 43
PART II
THE PANDEMIC PHASE: SHUTDOWN, RECESSION, AND
RECOVERY 63
4 Theories of economic shutdown 65
5 Recession, forecasting, and economic policy 85
6 Economics of recovery 106
PART III
ECONOMIC ANALYSIS OF PANDEMIC OUTCOMES 127
7 Healthcare economics 129
8 Inequality of outcomes 149
vi Brief contents
9 Energy, the environment, and climate change 168
10 Economics of education 189
11 Economics of technology and innovation 208
12 International economic perspectives 227
13 New economic geography 249
14 Game theory and mutual interdependence 269
15 A trail of disruption 291
Index 311
DETAILED CONTENTS
List of figures xix
List of tables xxii
Preface xxiii
Acknowledgments xxiv
An overview of the book xxv
Learning objectives xxvi
1 Introduction to pandemic economics 1
Pandemic economics 1
The economic approach 2
Economic methodology 2
Economics and epidemiology 3
From containment to recovery 4
Economic costs of the downturn 4
Confirmed cases 5
A pandemic origin story 6
Zoonoses 6
Black swan 7
Black elephant 8
Previous pandemics and economic history 9
Plague pandemics 9
Virulence 9
Plague of Justinian 10
Black Death 10
Modern Plague 11
Additional disease outbreaks 11
Smallpox 12
Spanish flu 12
Acquired Immune Deficiency Syndrome 12
SARS-CoV-1 12
Disease outbreaks and scientific advance 13
Disease outbreaks and human civilization 13
Rules of pandemic economics 13
To reopen the economy, control the disease 13
During pandemics, people respond to incentives 14
Pandemics impede the process of globalization 14
Flattening the epidemic curve creates economic costs 15
Government intervention is not the only cause of economic damage 15
During economic shutdown, governments should help 15
viii Detailed contents
Economies do not follow optimal recovery paths 15
Regions that reopen with haste experience secondary outbreaks 16
Government and business connections influence pandemic outcomes 16
Pandemics require collective responses and collaboration 16
Policy should rely on science 16
In the presence of a shortage, price may not adjust 17
Both economics and ethics influence vaccine distribution 17
Pandemics reorient relationships and lead to calls for change 17
Summary 17
Chapter takeaways 18
Terms and concepts 18
Questions 19
References 19
PART I
INVESTIGATION AND RECOGNITION 21
2 Economics of optimal disease control 23
Economic cost and the control of infectious disease 23
Progression of ideas in economics 24
Competing ideas 24
Relativism 25
Absolutism 26
Synthesis of relativism and absolutism 26
Extraordinary and ordinary research 27
Paradigm and paradigm shift 27
Economics of science, knowledge, and information 28
Optimal disease control 29
Susceptible, Infected, and Recovered Model 29
Rates of infection and recovery 29
Important parameters 30
Epidemic curve 30
Reproduction statistics 31
Basic reproduction number (R ) 31
0
Measuring the value of R 32
0
Variance in potential outcomes 32
Characteristics of the basic reproduction number 33
Shapes of additional infection waves 33
Social distancing 34
Effective reproduction number (R) 34
e
Herd immunity 35
Limitations of the SIR model 36
The economic approach to optimal disease control 36
Optimal targeted lockdowns 37
Equilibrium social distancing 38
Value of human life 38
Summary 39
Chapter takeaways 40
Terms and concepts 40
Questions 41
References 41
Detailed contents ix
3 Globalization, networks, and contagion 43
Systems of interconnection 43
Globalization 44
Epochs of globalization 45
The current epoch 45
Global flows 46
Types of global flows 46
Liquid modernity 46
Choke points 47
Global arrangements 48
Networks 48
Economics of networks 49
Network structure 49
Network characteristics 50
Network size 51
Network topologies 51
Superspreaders 51
Network applications 53
Disease networks 53
Energy networks 54
Supply chain networks 55
Innovation networks 56
Contagion 57
Contagion and negative flows 57
Contagion as a process 57
Measuring the likelihood of outcomes 58
Summary 58
Chapter takeaways 59
Terms and concepts 59
Questions 60
References 61
PART II
THE PANDEMIC PHASE: SHUTDOWN, RECESSION, AND
RECOVERY 63
4 Theories of economic shutdown 65
Shutdown interval 65
Flattening the epidemic curve 66
Nonpharmaceutical interventions 66
Swiss cheese model of pandemic defense 67
Sheltering-in-place 67
Social distancing 68
Quarantines 68
Public health benefits of nonpharmaceutical interventions 69
Tradeoff between health and the economy 69
Assimilation of workers 69
Suboptimal position 70
Theories of economic shutdown 70
