Ernesto Stein, an economist at the Inter-American Development Bank, normally spends his time thinking about industrial policy in Latin America. 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 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. “Commitment problems are important in the world of economics,” Mr. Stein noted. But economists, too, have broken from other work to explore what they can add to understanding a world upended by disease.

Source: International New York Times April 05, 2020 18:51 UTC