How Economists Are Trying to Answer Coronavirus Questions
By Eduardo Porter Published April 5, 2020 Updated April 6, 2020
The New York Times
Ernesto Stein, an economist at the Inter-American Development Bank, normally spends his time thinking about industrial policy in Latin America. But recently, a map in The New York Times caught his eye. It illustrated how hospital systems in some regions of the United States would be quickly overwhelmed by the spread of the coronavirus while others still had resources to spare.
This, Mr. Stein thought, was a problem that economists could help solve: A “market” in ventilators — in which hospitals in states with ventilators to spare lent them or rented them to hospitals in needy states — could help ease shortfalls and perhaps save millions of lives. This market doesn’t exist, though, because there is no enforceable rule or covenant — what economists call a commitment device — that ensures that needy states would give them back.