An Open Letter from 289 Australian Economists on Tradeoffs During the COVID-19 Crisis

Corresponding authors:

Chris Edmond (cedmond@unimelb.edu.au)
Steven Hamilton (steven_hamilton@gwu.edu)
Richard Holden (richard.holden@unsw.edu.au)
Bruce Preston (bruce.preston@unimelb.edu.au)

The views expressed are those of the signatories and not necessarily those of their employer.

19 April 2020

Dear Prime Minister and Members of the National Cabinet:

The undersigned economists have witnessed and participated in the public debate about when to relax social-distancing measures in Australia. Some commentators have expressed the view that there is a trade-off between the public health and economic aspects of the crisis. We, as economists, believe this is a false distinction.

We cannot have a functioning economy unless we first comprehensively address the public health crisis. The measures put in place in Australia, at the border and within the states and territories, have reduced the number of new infections. This has put Australia in an enviable position compared to other countries, and we must not squander that success.

We recognise that the measures taken to date have come at a cost to economic activity and jobs, but believe these are far outweighed by the lives saved and the avoided economic damage due to an unmitigated contagion. We believe that strong fiscal measures are a much better way to offset these economic costs than prematurely loosening restrictions.

As has been foreshadowed in your public remarks, our borders will need to remain under tight control for an extended period. It is vital to keep social-distancing measures in place until the number of infections is very low, our testing capacity is expanded well beyond its already comparatively high level, and widespread contact tracing is available.

A second-wave outbreak would be extremely damaging to the economy, in addition to involving tragic and unnecessary loss of life.

Sincerely,