Contra Flattening the Curve: Epidemiology vs Economics
This article discusses a major problem with epidemiological models that utilize a fixed value for healthcare system capacity. The problem is that healthcare system capacity isn't fixed. As in all other economic goods and services, supply increases with demand.
Regulators, policymakers, and academics are all too often acting under the assumption of fixed healthcare capacity, and this leads directly to poor policy recommendations. Flattening the curve via the Hammer and the Dance is one example of famous, socially-approved, potentially dangerous advice. Extreme measures which result in downward pressure on demand also prevent supply from scaling appropriately. Historical economic literature indicates such policies are a net loss over time and may result in a higher count of total deaths in the long term, with lower quality of life for survivors.
I recently wrote about many of these policy flops which have been based on poor models. Another article that rolled out yesterday, here, describes how the CDC is preventing face mask supply from scaling with overbearing certification requirements that take more than three months, plus fees, to deal with.
The Hammer and the Dance outlines policy and social regulation recommendations for 6-18+ months. A free healthcare system would increase supply along various margins in 1-3 months, and our non-free healthcare system can increase supply along various margins in 1-6 months.
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