Month: February 2021

How to Double the Number of Moderna and Pfizer Factories

Theory and data both suggest that a much smaller dose–perhaps as low as 1/4 the current dose—of both the Moderna and Pfizer vaccines are as effective as a larger dose. Half doses of Moderna and Pfizer would be equivalent to instantly doubling the number of Moderna and Pfizer factories and would save hundreds of thousands of lives and be worth hundreds of billions of dollars in world GDP. Clinical data from adults 18-55 from the Moderna Phase II trial already suggest that quarter-doses are effective, which is why Operation Warp Speed chief, Moncef Slaoui has advocated for half-doses (leaving plenty of margin).

“We know that, for the Moderna vaccine, giving half of the dose to people between the ages of 18 and 55, two doses [at] half the dose … we know it induces identical immune response” to the currently authorized dose, Slaoui added.

Another way of putting this is that new clinical trials on dosing would be tremendously valuable. Ideally, we could use correlates of protection and do a bridging trial to infer the effectiveness of half-doses. The FDA has already said they will accept a bridging trial for new mRNA vaccines for variants, which is the right decision. The FDA should also accept a bridging trial for new dosing.

If new clinical trials are deemed necessary, dosing trials could be run as challenge trials but instead of comparing half-doses to placebo we would compare full-doses to half-doses. Thus, everyone in the challenge trial would be vaccinated, massively lowering risks. If we can’t do challenge trials even with vaccinated volunteers (!) then let’s get started on clinical trials. The NIH created the ACTIV program to speed clinical trials. Use it.

New clinical trials are valuable not just for dosing but also for approving new vaccines. Equivalence trials on the Sputnik and Sinopharm vaccines, for example, could be very valuable. In other words, we would trial Sputnik and Sinopharm against Pfizer and Moderna. A lot of people would be quite willing to join a trial in which the worst outcome is most likely getting a somewhat less effective vaccine–that’s much better than no vaccine!

The value of experiments, or let’s call them pilot studies, right now is immense. We can do pilot studies on half dosing for Moderna and Pfizer vaccines much faster and cheaper than we can build twice as many factories. So let’s do it!

Danish minimum wage data (it ain’t monopsony)

This paper estimates the long-run impact of youth minimum wages on youth employment by exploiting a large discontinuity in Danish minimum wage rules at age 18 and using monthly payroll records for the Danish population. We show theoretically how the discontinuity in the minimum wage may be exploited to estimate the casual effect of a change in the minimum wage of youth on their employment. On average, the hourly wage rate jumps up by 40 percent when individuals turn eighteen years old. Employment (extensive margin) falls by 33 percent and total labor input (extensive and intensive margin) decreases by around 45 percent, leaving the aggregate wage payment nearly unchanged. Data on flows into and out of employment show that the drop in employment is driven almost entirely by job loss when individuals turn 18 years old. We estimate that the relevant elasticity for evaluating the effect on youth employment of changes in their minimum wage is about -0.8.

Here is the paper by Claus Thustrup Kreiner, Daniel Reck, and Peer Ebbesen Skov.  For Mississippi it might be worse.

I’ll suggest a general methodological approach here.  I think that for Mississippi the chances for this kind of outcome are at least 0.8.  Maybe for many of the richer states it would be 0.4?  Based on those probabilities, I don’t want to do it, even if you think it is “more likely” that in most areas a higher minimum wage won’t destroy many jobs.  What probabilities would be offered by those who defend a minimum wage hike?

Via Bob B.

Why don’t Americans take the law seriously any more?

Why do so many Americans today have such an unusual relationship with the law? Has the relative isolation of the pandemic made people more susceptible to crowd enthusiasms, and thus less respectful of authority? Or is it that their daily interactions with the internet are so frequent and intense that their emotions are governed by some new set of principles, and the law feels like a distant memory? Might some recent leaders have been setting bad examples when it comes to respecting the law?

2020 was also a year in which the U.S. murder rate rose significantly — by more than 50% in many cities — and reckless driving was much more common.

If the U.S. is ever going to get back to normal, we need to understand this problem. It’s not just about breaking the law. It’s that so many Americans don’t even seem to notice that the law applies to them, too.

Yes the column has riffs on various recent episodes of brazen, poorly thought out law-breaking — did you have to put that Capitol selfie on-line?  That was then, this is now:

During the era of civil disobedience, Americans marched for civil rights or to protest the Vietnam War. Sometimes they broke the law deliberately, but there was a finely honed sense of the various lines. If your goal was to be arrested, you knew how to achieve it without being locked away for years. There were guides for how to behave and get arrested, and many arrests were orchestrated.

Martin Luther King Jr. was not shocked when he ended up in Birmingham jail, where he composed his famous letter. Getting arrested was a sign of status with other members of the movement, and multiple arrests meant that you understood the lines well enough to be spending most of your time out in the world, ready to get arrested yet again.

So what happened?

The anti-science presidency?

…recent Congressional Budget Office estimates suggest that with the already enacted $900 billion package — but without any new stimulus — the gap between actual and potential output will decline from about $50 billion a month at the beginning of the year to $20 billion a month at its end. The proposed stimulus will total in the neighborhood of $150 billion a month, even before consideration of any follow-on measures. That is at least three times the size of the output shortfall.

In other words, whereas the Obama stimulus was about half as large as the output shortfall, the proposed Biden stimulus is three times as large as the projected shortfall…

Looking at incremental deficits relative to GDP gaps is only one way of assessing the scale of a fiscal program. Another is to look at family income losses and compare them to benefit increases and tax credits. Wage and salary incomes are now running about $30 billion a month below pre-covid-19 forecasts, and this gap will likely decline during 2021. Yet increased benefit payments and tax credits in 2021 with proposed stimulus measures would total about $150 billion — a ratio of 5 to 1. The ratio is likely even greater for low-income individuals and families, given the targeting of stimulus measures…

If the stimulus proposal is enacted, Congress will have committed 15 percent of GDP with essentially no increase in public investment to address these challenges. After resolving the coronavirus crisis, how will political and economic space be found for the public investments that should be the nation’s highest priority?

Here is more from L. Summers.  And just wondering — what is it you all think the multiplier is these days?  Asking for a friend.

Thursday assorted links

Emmott Interviews Tabarrok for the Browser

Bill Emmott, former editor-in-chief of The Economist and now co-director of the Global Commission for Post-Pandemic Policy, talks to Alex Tabarrok, Professor of Economics at George Mason University and co-author of the blog Marginal Revolution, on lessons learned from the pandemic so far, and what lies ahead.

Self-recommending. I’d say it’s a very good interview but there was no question that I was outclassed by Bill Emmott’s zoom background, live from Dublin. Many thanks to the ever-excellent The Browser for hosting.

Monopsony it ain’t, rather output loss

We use highly consistent national-coverage price and wage data to provide evidence on wage increases, labor-saving technology introduction, and price pass-through by a large low-wage employer facing minimum wage hikes. Based on 2016-2020 hourly wage rates of McDonald’s Basic Crew and prices of the Big Mac sandwich collected simultaneously from almost all US McDonald’s restaurants, we find that in about 25% of instances of minimum wage increases, restaurants display a tendency to keep constant their wage ‘premium’ above the increasing minimum wage. Higher minimum wages are not associated with faster adoption of touch-screen ordering, and there is near-full price pass-through of minimum wages, with little heterogeneity related to how binding minimum wage increases are for restaurants. Minimum wage hikes lead to increases in real wages (expressed in Big Macs an hour of Basic Crew work can buy) that are one fifth lower than the corresponding increases in nominal wages.

That is a new paper from Orley Ashenfelter and Štěpán Jurajda.  I will ask again my standard question: don’t we have ways of helping poorer individuals that boost output rather than harming it?  Why don’t we focus on those?

Fortunately roadblocks are arising.

Via Ilya Novak.

The anti-science presidency? (“don’t show your work!”)

President Joe Biden has moved swiftly to rev up the regulatory state by weakening oversight and effectively ending a reality-based assessment of the costs and benefits of federal regulation.

It may have gone largely unnoticed amid a flurry of executive orders Biden has signed since taking office less than two weeks ago, but a January 20 memo from the White House to the “heads of executive departments and agencies” outlines a regulatory framework that will empower federal bureaucrats to count unquantifiable “benefits” when weighing the potential impact of new regulations.

Specifically, Biden instructed those officials to revamp their regulatory review processes to “promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.” The memo also states that the new regime “serves as a tool to affirmatively promote regulations.”

Here is more from Eric Boehm at Reason, via Scott Sumner.

A simple model of grabby aliens

According to a hard-steps model of advanced life timing, humans seem puzzlingly early. We offer an explanation: an early deadline is set by ‘grabby’ civilizations (GC), who expand rapidly, never die alone, change the appearance of the volumes they control, and who are not born within other GC volumes. If we might soon become grabby, then today is near a sample origin date of such a GC. A selection effect explains why we don’t see them even though they probably control over a third of the universe now. Each parameter in our three parameter model can be estimated to within roughly a factor of four, allowing principled predictions of GC origins, spacing, appearance, and durations till we see or meet them.

That is a new paper from Robin Hanson, Daniel Martin, Calvin McCarter, and Jonathan Paulson.  And here is Robin’s associated blog post.

First Doses First, Now! – New Information

A lot of new information has dropped recently about the efficacy of First Doses First.

First, as I mentioned yesterday, we now have epidemiologists and vaccine researchers saying that for people previously infected with COVID a second dose is not necessary and may be “overkill.” Given how many people have had COVID, this increases the net benefit to First Doses First for everyone significantly.

Second, an important new study verifies that for the AZ vaccine a longer delay for the second dose is better because it generates a more powerful immune response (picture from the FT). This is a common finding for vaccines. The authors write:

ChAdOx1 nCoV-19 vaccination programmes aimed at vaccinating a large proportion of the population with a single dose, with a second dose given after a 3 month period is an effective strategy for reducing disease, and may be the optimal for rollout of a pandemic vaccine when supplies are limited in the short term.

In addition “Analyses of PCR positive swabs in UK population suggests vaccine may have substantial effect on transmission of the virus with 67% reduction in positive swabs among those vaccinated.” In other words, the vaccine cuts transmission risk.

As I have said before “the US failure to authorize the AstraZeneca vaccine in the midst of a pandemic when thousands are dying daily and a factory in Baltimore is warmed up and ready to run is a tragedy and dereliction of duty of epic proportions.”

Third, the New and Emerging Respiratory Virus Threats Advisory Group (NERVTAG), a scientific advisory group to the British government, recently considered the risks of immune escape from the delayed second dose strategy and concluded that although the risk is real it is likely small, especially in comparison to other sources of immune escape such as therapeutics and natural infection. Moreover, the risk is outweighed by the measurable benefits of getting more does out quickly.

It is not currently possible to quantify the probability of emergence of vaccine resistance as a result of the delayed second dose, but it is likely to be small.The UK currently has more than 1,000 COVID-19 related deaths each day and has limited supplies of vaccine. In the current UK circumstances the unquantifiable but likely small probability of the delayed second dose generating a vaccine escape mutant must be weighed against the measurable benefits of doubling the speed with which the most vulnerable can be given vaccine-induced protection.

..a single dose of vaccine does not generate a new/novel risk. Given what we have observed recently with the variants B.1.1.7 and B1.351, it is a realistic possibility that over time immune escape variants will emerge, most likely driven by increasing population immunity following natural infection.

Fourth, the British health establishment has largely solidified around First Doses First. Consider this from the Four UK’s Chief Medical Officers.

The 4 UK Chief Medical Officers agree with the JCVI that at this stage of the pandemic prioritising the first doses of vaccine for as many people as possible on the priority list will protect the greatest number of at risk people overall in the shortest possible time and will have the greatest impact on reducing mortality, severe disease and hospitalisations and in protecting the NHS and equivalent health services.

Fifth, the US public health experts are beginning to come around to the economic point of view. Consider Experts tout delaying 2nd COVID vaccine dose as US deaths mount which notes:

“The maximum public health benefit would come from giving a single dose to as many people as possible, and following up with a second dose when supply improves,” said Neal Halsey, MD, of Johns Hopkins University, in an interview. Halsey and Stanley Plotkin, MD, co-authored a letter in Clinical Infectious Diseases last week explaining how delaying a second dose of vaccine would accelerate the US vaccine rollout.

Halsey said data from both companies show the first dose of the vaccine offers significant protection against COVID-19 in the short term, for at least 1 to 3 months after injection. He also said he and Plotkin believe this was the most beneficial public health strategy even before the arrival of new variants of the virus was discovered.

“There are a number of examples of changing [vaccination] course because ACIP takes into account public health impact,” Halsey said. “We asked the ACIP to review in depth this strategy to give one dose as rapidly as possible. Such a meeting should be scheduled as soon as possible.”

The University of Minnesota’s Michael Osterholm, PhD, MPH, said yesterday on “Meet the Press”  that he believes the United States has to change direction on vaccine strategy in light of the possibility of a surge of new infections coming from variant strains.

I believe that the US will go to First Doses First. The only question is will we go to First Doses First soon, when it can still help, or will we be forced to do it later in an act of desperation and agony.

*Empire of Silver*

The subtitle is A New Monetary History of China, and the author is Jin Xu.  This is the first book this year to go straight to my “best books of the year list,” here is one excerpt:

Let’s shift the scene back to 1262, when the two poles of world civilization, Venice in the West and the Southern Song in the East, both faced the specter of war, and funding for these wars hung by a thread.  Almost simultaneously, the authorities of both places came up with plans to deal with their emergencies, both involving the most advanced financial innovations of that time.  The Southern Song’s Jia Sidao raised military funding by using the steadily devaluing huizi to buy up public land the strip the populace of wealth.  Venice took a different road: Its parliament authorized the government to mortgage its tax revenue, and when a fiscal deficit developed, the administration issued government bonds paying interest of 5 percent.  In retrospect, Venice’s financial innovation summoned the magic power of public debt as capital and effectively led Europe into an era of financial revolution.  As for china, the excessively issued huizi did not regain the favor of the market; rather, public discontent and unrest threw open the door for invasion by the Mongolians.

…we witness China taking the lead on finance and currency, but in the wrong direction.  China, at a very early stage, had “flying money” (feiqian) for remitting funds, as well as pawnshops, silver shops, and other such establishments for credit transfer; the Song dynasty’s paper currency originated in private institutions; and private local banks (qianzhuang) and money-exchange shops (piaohao) experienced extraordinary growth in the Ming and Qing dynasties.  So why didn’t China produce a modern banking industry?

…The unbankability of China’s currency led to the failure of China’s paper currency system and forced it to take the silver route. Without banks, and without the coinage of silver, progressing from bank notes to paper currency was out of the question.  Currency could only exist in the form of confusing and outmoded metage currency.

Definitely recommended, you can buy it here.  And “metage” — what a good word!

Tuesday assorted links

1. Is the English strain picking up some features of the South African strain? And the new strains do seem somewhat more dangerous.

2. Joe Stiglitz comes perilously close to the Austrian theory of the business cycle.

3. Update on the Russian vaccine (New Yorker).  And this WSJ piece.  It seems to work?  And yet more.

4. ““What we didn’t anticipate was that they would break the law,” Goldenfeld said — that some students, even after testing positive and being told to quarantine, would attend parties anyway.”  A look at some of the models.

5. “Dubai announced Monday the creation of a “space court” to settle commercial disputes, as the UAE — which is sending a probe to Mars — builds its presence in the space sector.”  Link here.

6. My on-line talk to PayPal.  Mostly Q&A, and they did ask me about Nirvana’s “Aneurysm.

7. Incoming vaccine data from Israel.

Had Covid? You May Need Only One Dose

The barriers are breaking. Step by step we move closer to First Doses First. New results from a small-scale study suggest that people who have had COVID have strong reactions to the first dose and may not need the second dose.

NYTimes: Based on these results, the researchers say, people who have had Covid-19 may need only one shot.

“I think one vaccination should be sufficient,” said Florian Krammer, a virologist at the Icahn School of Medicine at Mount Sinai and an author on the study. “This would also spare individuals from unnecessary pain when getting the second dose and it would free up additional vaccine doses.”

…People who have had Covid seem to be “reacting to the first dose as if it was a second dose,” said Akiko Iwasaki, an immunologist at the Yale School of Medicine. So one dose is probably “more than enough,” she said.

A study published earlier this month reported that surviving a natural infection provided 83 percent protection from getting infected again over the course of five months. “Giving two doses on top of that appears to be maybe overkill,” she added.

So for the 25 million to 100 million Americans who have already been infected by COVID it may be better for them personally to delay the second dose. In short, a significant fraction of second doses have little to no value. This (unsurprising) finding means that First Doses First is an even better strategy even if we can’t condition doses on previous infection.

Most important, First Doses First gets more people significant immunity faster which is good for the vaccinated and also drives down R which is good for society as a whole, even the unvaccinated.

The Biden administration has been more pro-active than the Trump administration on tests and vaccination and has already made some goods calls on getting more doses out faster. I hope they continue to be bold. We need quick, bold, and decisive action.

Just A Few Weeks Delay

NYTimes: Federal regulators could decide within a few weeks whether to allow Moderna, the Massachusetts biotech company that developed one of the two federally authorized Covid-19 vaccines, to increase the number of doses in its vials — which could accelerate the nation’s vaccination rate.

Moderna is hoping to raise the number of doses in its vials to as many as 15 from the current 10 doses, a potential 50 percent increase. The proposal reflects the fact that the company has been ramping up production of its vaccine to the point where the final manufacturing stage, when it is bottled, capped and labeled, has emerged as a roadblock to expanding its distribution.

The FDA will decide in a few weeks???! That is not quick, bold, and decisive action.

Thousands of people have already died over a few weeks delay–multiple times. It’s true that there are tradeoffs but the FDA has no special knowledge or ability to navigate those tradeoffs. Let Moderna make the decision in consultation with vaccinators on the front lines.