Unlocking

John Quiggin70 Comments

Lockdowns work. That’s the evidence from many different countries now, including Australia. To be more precise, lockdowns reduce the effective reproductive rate of the virus to the point where it is below 1, meaning that, on average, each infected person passes the disease on to less than one other person. As long as this is sustained, the number of new cases will keep declining, as we have now seen. Potentially, as has been claimed to be the case in China, it will reach zero.

Although some people are still talking about “flattening the curve”, it now seems clear that the best strategy is (near) eradication, pushing the number of infections down to (or near) zero, and preventing any resurgence. But what comes next?

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Keeping one day ahead of the curve

John Quiggin37 Comments

As soon as the government released its modelling of the pandemic a few days ago, I realised something was badly wrong. The modelling showed infections increasing even under lockdowns, which obviously wasn’t happening. The crucial parameter here is R, the number of new infections generated by each existing infection. If R is greater than 1, the number of infections grows exponentially, but if R is less than one, it declines, eventually approaching zero. The knife-edge case is R=1, when the number stays constant.

On checking the paper on which the modelling was based, I found that it did indeed assume R>1, even with social distancing. This was less surprising when I realized it was based primarily on data from the initial outbreak in Wuhan, before the lockdown in China had taken full effect. (I later discovered that the report had been given to the government in February, which makes its release now rather pointless).

I quickly drafted an article explaining the importance of R and the fact that the modelling was out of date. I thought it would attract plenty of interest, but in fact it was very difficult to place. A lot of editors were unwilling to challenge the government on this. I eventually managed to get it run in Inside Story.

My time outside the tent didn’t last long. Today, the Deputy CMO Paul Kelly gave an analysis that matched mine almost exactly, and effectively abandoned the “flattening the curve” strategy in favour of eradication. The only difference is that he thinks R is “on the cusp of” falling below 1, while I think it’s already there. Some conservativism is called for here.

This has been the whole story of the pandemic for me. Almost every time I’ve criticised the government for not doing or saying something, they’ve got it right (or nearly right) a day or two later. Compared to my usual experience of waiting years for any kind of vindication of my argumetns on policy, it’s a strange feeling.

Environmental law after a year of catastrophe

John Quiggin5 Comments

The government is undertaking a review of one of our central pieces of environmental law, the Environmental Protection and Biodiversity Protection Act. They have a facility for quick comments of up to 300 words, as well as traditional submission (thanks to the Australian Conservation Foundation for the link). Here’s my 300 words

The catastrophes that have afflicted Australia and the rest of the world over the last year, including coral bleaching, unprecedented wildfires and the coronavirus pandemic point up the need for a radical reconsideration of existing approaches to environmental protection.

Far from achieving a sustainable balance between economic, social and environmental values, recent Australian policy has focused on protecting sectional interests and amplifying second-order issues such as the effect of environmental policy on energy costs.

The disasters of the past year show that the risks of widespread species extinction are far greater than has previously been assumed. As well as reflecting specific risks associated with exploitation of wild animal species for food and other uses, the Covid-19 pandemic has dramatically illustrated the folly of the presumption that, since previous potential disasters have not materialised or have been successfully, managed, the threat of environmental catastrophe can safely be ignored or deferred for the future.

In terms of the EPBC act, the key implications are:

  • a much stronger weight on preventing further loss of biodiversity
  • consideration of all effects of proposed developments, notably including Scope 3 emissions of coal, oil and gas projects

Flattening the curve vs (near) eradication

John Quiggin54 Comments

Here are some comments I’ve written in a rapid response to Brendan Murphy’s recent press conference. (I haven’t yet seen even the summary of the modelling that has apparently been released, just a picture of flattened curves.)

The idea of “flattening the curve” is fundamentally misleading, since it implies that most people will be infected until herd immunity is achieved, while the number of cases remains within the capacity of the health system. But assuming spare capacity of 2 beds per 1000 people, and 20 per cent of patients requiring treatment, we would need at least five years for herd immunity to be achieved. Optimal policy is to aim for near-complete eradication, then maintain sufficient distancing to ensure local outbreaks don’t spread. We will need quarantine for international arrivals until vaccination is general, or until other countries achieve near-complete eradication.


The main insight from economics is derived from option value concept. Better to adopt stringent measures early and relax if they turn out to be excessive than to move slowly and risk widespread community transmission.

Australia’s post-war recovery program provides clues as to how to get out of this

John Quiggin40 Comments

I’m running behind, but here’s my latest piece in the Conversation. Although the situation is very different from that of 194t, this, from the White Paper on Full Employment is as relevant as ever

Despite the need for more houses, food, equipment and every other type of product, before the war, not all those available for work were able to find employment or to feel a sense of security in their future.

On the average during the twenty years between 1919 and 1939 more than one tenth of the men and women desiring work were unemployed. In the worst period of the depression, well over 25% were left in unproductive idleness.

By contrast, during the war no financial or other obstacles have been allowed to prevent the need for extra production being satisfied to the limit of our resources.

Under emergency conditions, all sorts of things that were said to be impossible are suddenly found to be necessary, and the objections raised against them turn out to have been excuses for serving the interests of the well off. That’s the case for both Universal Basic Income and a Job Guarantee, both of which now exist in embryonic form.