Month: March 2021

The EU Vaccine Bungling

The EU vaccine rollout has been remarkably bungled even by the standards we have come to expect from Western governments. In advising governments I and the AHT team argued that vaccines were the world’s easiest cost-benefit test because Billions<<Trillions. Yet when manufactures offered the EU vaccines worth thousands of dollars a dose for just $5-$40 a dose the EU foolishly shouted “price gouging” and wasted weeks in dickering. I leave it to you as an exercise to calculate the value EU governments implicitly placed on European lives.

The latest bungling was the halt by over a dozen European governments of vaccination with the AstraZeneca vaccine due to fears that it might cause very rare blood clots (wisely Belgium and Great Britain continued vaccinations). After a review, the EMA has now cleared the vaccine:

The European Union’s drug regulator said on Thursday that the AstraZeneca vaccine was safe and effective, a finding that officials hope will alleviate concerns about possible rare side effects involving blood clots and allow more than a dozen countries that halted its use to add it back into their arsenal against the resurgent coronavirus.

The halt, however, was never justified. The EMA press release make this clear because it hasn’t added much more information it only underlines what we already knew. Namely, there was no increase in the overall risk of blood clots. There might be an increase in a very rare type of blood clot but that wasn’t obvious, especially when one takes into account that when you are monitoring hundreds of rare side effects it’s bound to be the case that some show statistically significant effects even if there are no true effects. As a result, the more conditions you test the higher standards you should apply to judge a difference as statistically significant (ala Bonferroni Correction which the EMA does not appear to have done). Moreover, even assuming that the rare vaccine effects were real they were thousands of times less than the effects of blood clotting from COVID itself so if you wanted to avoid blood clots the way to do so was to take the vaccine. Moreover, even assuming that the rare effects were real, they were not larger than those from other common activities such as flying or taking contraceptive pills. Moreover, and this point does not seem to have been made prominent, the most plausible argument for the vaccine creating blood clots is through the generation of the spike protein, which all the vaccines do, so there is little reason to believe that the Pfizer or Moderna vaccine would not also have the same problems (which they might). Thus, the focus on AZ seemed oddly misplaced. Draw your own conclusions on that.

The end result is that more people will die from the halt than could possible have been saved by the halt. Why did this happen? One reason is the absurd focus on doing anything to alleviate “vaccine hesitancy.” To alleviate vaccine hesitancy we have repeatedly sent the message that the vaccines are “safe, safe, safe.” When we should have said the vaccines pass a cost-benefit test (with flying colors!) and are much safer than many drugs people take for less serious conditions. But every drug or vaccine has side-effects. Tradeoffs are everywhere.

Unfortunately, vaccine hesitancy seems to have become a catch-all excuse for never having to show your work with a cost-benefit analysis. As I said in my post Don’t Delay a Vaccine to Allay Fear (should have said don’t halt one either!):

We should not let public policy be guided by the most risk averse, fearful, and scientifically illiterate among us.

[And]… rather than alleviating fear, delay may increase fear. People may reason, if the FDA is taking this long to review the evidence when thousands of people are dying every day it must be a hard decision.

The latter point, of course, is exactly what has happened. The EU halt has increased vaccine hesitancy rather than alleviating it.


  • Feb. 2: France restricts AstraZeneca vaccine to those aged less than 65 years of age.
  • March 2: France approves AZ vaccine for all ages.
  • March 19: France recommends AstraZeneca vaccine only to those aged more than 55 years.

I guess 55-65 years of age is the sweet spot.

How bad is EU bungling? So bad, Paul Krugman and I are in agreement. He almost quotes me on “Progressivism: The haunting fear that someone, somewhere, may be making a profit.”

A simple plan for sick leave

With Covid as a prompt, but not only because of Covid, it is worth thinking about the economics of sick leave more seriously.  How about this for a purely private solution for face-to-face workplaces?

Give each full-time worker three sick days each year.  It is not only “paid” sick leave, rather you are paid an extra bonus to take those days.  That way you do not bring a cold into the office.  On net, it now becomes more than culturally acceptable to plead sickness.  Most people will be doing it, and without shame.

Other components of the wage package can adjust to keep the net real wage constant.

Some very hardy individuals still won’t take any sick days at all, and many of them will love working.  In fact they should be “taxed” somewhat more, since their intangible benefits from working are so high.

If some individuals allocate their sick days to days when they are actually sick, workplace transmission of illness will decline, to the benefit of productivity.  And a general norm is set that may make it easier to deal with the next pandemic.

Does the NFT craze make artistic sense?

That is the topic of my latest Bloomberg column, here is one excerpt:

NFTs stand a reasonable chance of being an entirely new art form, and this may be the beginning of their long, noble and (yes) controversial history. The buyer of “Everydays,” an investor who goes by the name Metakovan, may well be remembered as the first patron of digital artists. That is a legacy you cannot buy for any sum in most other walks of life. You can become a kind of Medici of the blockchain.

Such a role is not for everybody. But this $69.3 million will probably not meaningfully detract from the private consumption of Metakovan, founder of a cryptocurrency fund called Metapurse, which invests in NFTs. No doubt he will still be able to buy a yacht and the world’s finest sushi.

Maybe NFTs will not endure, which is a risk for anyone playing a pioneering role in a new genre. That is why the price was not $200 million or more. In any case, this is a world in which Marcel Duchamp’s urinal sculpture still is exhibited in major museums, regarded by many critics as a masterpiece of the 20th century, and it sold at auction for $1.6 million in 2002. Canvases painted a single color, and other forms of abstract and conceptual art, remain a major part of recent art history and can sell for tens of millions.

The point is not to argue over what qualifies as “art.” It is simply that it is a mistake to assume that NFTs will fail in the art world.

Keep in mind that as the value of bitcoin and other crypto assets rises, more of the world’s billionaires will trace their wealth to crypto. It is unlikely that they are all looking to buy Rembrandts and Picassos.


With his purchase, Metakovan has now generated significant publicity for NFT artworks and boosted their value. His portfolio of NFTs is now probably worth much more, and in net terms he may well be wealthier than the day before he bought “Everydays.” He is also now known as an especially important collector of NFT art. Other artists and sellers may offer him their best works, hoping to be affiliated with a prestigious collection. He will be at the center of an information network about valuable NFTs. How is that for clever?

Again, it is not art but here is the NFT for the first post ever on Marginal Revolution, mentioned in the column as well.  Here is a good Medium essay by the purchasers themselves, outlining their motives.

The importance of superspreading events

Empirical observation throughout the SARS-CoV-2 pandemic has shown the outsized role of superspreading events in the propagation of SARS-CoV-2, wherein the average infected person does not transmit the virus. Our results suggest the same dynamics likely influenced the initial establishment of SARS-CoV-2 in humans, as only 29.7% of simulated epidemics from the primary analysis went on to establish self-sustaining epidemics. The remaining 70.3% of epidemics went extinct…Furthermore, the large and highly connected contact networks characterizing urban areas seem critical to the establishment of SARS-CoV-2. When we simulated epidemics where the number of connections was reduced by 50% or 75% (without rescaling per-contact transmissibility), to reflect emergence in a rural community, the epidemics went extinct 94.5% or 99.6% of the time, respectively…The high extinction rates we inferred suggest that spillover of SARS-CoV-2-like viruses may be frequent, even if pandemics are rare.

Here is the paper, via the excellent Kevin Lewis.

Thursday assorted links

1. The rise of basketball in India.

2. “Still, the Bigamy Bill faced an uphill battle in Utah’s legislature, which is eighty-six per cent Mormon—although only about sixty-four per cent of the state’s residents are.” (New Yorker)  And Ukraine.

3. Hacksilver coins.  And John Cochrane on the new macro.  And how much should we borrow?

4. “Date me.”

5. Matthew Stephenson early to the party on Glyphs.

6. Brazilian health care system close to collapse.

Bigger Is Better When It Comes to Vaccine Production

My co-authors, Eric Budish and Chris Snyder, have an excellent piece in the WSJ:

We recently published a paper in the journal Science that aimed to quantify the enormous value of Covid-19 vaccine capacity: both existing and the value of building more. We worked with a team of economists, statisticians and policy experts led by the University of Chicago’s Michael Kremer.

While vaccines are intuitively very valuable, the numbers are mind-boggling. The value of three billion courses of annual vaccine capacity—enough to vaccinate rich countries by the end of 2021 and the world by the end of 2022—is $17.4 trillion, or $5,800 for every course. This reflects the value of getting people back to work and school, avoiding unnecessary deaths and preserving health. If anything, we suspect our figure is conservative.

We estimate that another billion courses of vaccine capacity is worth $1 trillion of additional global benefits, and could accelerate vaccination by two months for rich countries and five months for the world. This $1 trillion—$1,000 for each additional course—would be much higher if the pandemic takes a turn for the worse—if, say, new variants require fresh vaccination or some vaccine manufacturers hit production snags.

Is it physically possible to build more capacity? We don’t know how much more can be built and how quickly, but the global benefits of capacity—$5,800 for every vaccination course overall, and $1,000 for incremental capacity—far exceed the prices paid to firms in deals to date, between $6 and $40 a course. This means that private incentives are a fraction of the social value at stake.

Private incentives may be particularly poor when it comes to speed. Consider a firm that will vaccinate one billion people at a fixed price of $40 each. The firm earns the same $40 billion whether it supplies the billion courses in a single month or stretched over a year. But doing it in a month requires 12 times the capacity costs. If you are wondering why vaccination is taking so long, this is the basic economic reason.

…The recent announcement that Merck will produce the Johnson & Johnson vaccine is a great example of finding a creative way to build more capacity. We don’t have specific production numbers for this deal. But suppose deals like this one could create an additional 40 million courses a month for the U.S., starting in April. Our analysis suggests that such a capacity increase is worth $136 billion to the U.S. and allows Americans to be vaccinated by June instead of August. If this new capacity is donated to the world after the U.S. is finished using it, it would generate more than $500 billion in total global benefits and accelerate global vaccination by nearly three months.

There are also options for stretching what exists: delaying the second of two doses, giving only one dose to those previously infected, or using lower-dose regimens. If it turns out that half doses are almost as effective as full doses, or a single dose is almost as effective as a two-dose course, capacity would effectively double overnight—which our analysis suggests is worth several trillion dollars.

Is this truly an Irish equilibrium?

The British health system is the single most important issue driving opposition to Irish unification in Northern Ireland. Citizens of Northern Ireland get free medical care as part of the U.K.’s socialized medicine. British taxpayers subsidize Northern Ireland’s public services to the tune of $12.5 billion, according to one estimate. That’s a lot of money to give up for the nationalist cause. Nor is it clear more generally what the costs of unification would be or who would pay them, or what the economic benefits of unification might involve and who would get them.

It rubs my intuition the wrong way to believe that one form of socialised medicine over another is actually the major factor.  In any case, here is more from Kimberly Cowell-Myers.

Iceland liberation of the day

Iceland will open its borders to vaccinated foreigners from Thursday, making the north Atlantic island one of the first countries in the world to reopen to tourists after coronavirus. Iceland’s government had already allowed vaccinated travellers from the EU to enter without quarantine, but the new decision means visitors from its main tourist destinations of the US and UK will be allowed to enter…

Visitors to Iceland will have to show proof of full vaccination from a jab that has been approved by the European Medicines Agency, which currently excludes vaccines from China — a significant source of tourists to the country — as well as Russia’s Sputnik V.

Here is the full FT story.  Here is further coverage.  As an exercise, consider why vaccine passports might make more sense for Iceland than for the United States.

What should I ask Daniel Carpenter?

I will be doing a Conversation with Daniel, who is a professor of political science at Harvard and one of the world’s leading experts on the history of regulation and also the FDA.  Here is part of his bio:

Professor Carpenter’s previous scholarship on regulation and government organizations appears in Reputation and Power: Organizational Image and Pharmaceutical Regulation at the FDA (Princeton, 2010), winner of the Allan Sharlin Memorial Award of the Social Science History Association; and of The Forging of Bureaucratic Autonomy: Reputations, Networks and Policy Innovation in Executive Agencies, 1862-1928 (Princeton, 2001), winner of the Gladys Kammerer Prize of the American Political Science Association and the Charles Levine Prize of the International Political Science Association.  With David Moss of Harvard Business School, he is the author and co-editor of Preventing Regulatory Capture: Special Interest Influence in Regulation and How to Limit It (Cambridge, 2013).

And coming out in May:

Professor Carpenter’s research on petitioning appears in his forthcoming book Democracy by Petition: Popular Politics in Transformation, 1790-1870 (Harvard University Press, 2021)

So what should I ask him?

The beginnings of my early “job” publishing journal articles

No, I was not paid directly for this job, but it has been worth an enormous amount to me, most of all as a path to tenure and also future career opportunities of a broader nature.

I started publishing earlier than most people, with two articles accepted which I wrote at age nineteen, though it took a while for them to come out.

There I was at George Mason University, an undergraduate, and I figured I needed to do something to advance my lot.  And I already had the experience of beating adults at chess at young ages.  So it seemed to me I could publish something, even if not in the very best journals.

I was also well aware that GMU was specializing in various brands of Austrian and market-oriented economics, so some portfolio diversification would not be a bad thing, in part to ensure I would learn other traditions, and in part to signal that I was interested in them, as indeed was (and still is) the case.

I had been doing a lot of reading on the Cambridge capital debates, and so I thought I would try publishing a piece in the Journal of Post Keynesian Economics.  I sent it in, and they took it!  While I had thought this was possible, I still was quite surprised at the outcome, as it was my very first submission to a refereed journal.  The piece was “The rate of return in general equilibrium: a critique,” and it focused on the claims of Christopher Bliss and others that GE models were a successful resolution to the capital reswitching debates.  Editor Paul Davidson gave me detailed and excellent comments to help turn it into a publishable piece.

I was aware of course that such pieces would brand me as “not on the mainstream fast track,” but still it seemed like a very good deal to me.

Another area I had been studying was public goods theory, at the original behest of Walter Grinder, an early inspirational mentor of mine.  So I wrote up some of my ideas on public goods theory, but put them in a neo-institutionalist framework, and sent it off to Review of Social Economy, an institutionalist journal.

They accepted the piece too!  Of course I had to respond to the comments from Reviewer 2, ever-valuable training to this day.  Note that with these early pieces I received only modest help from GMU faculty at the time.

I also was doing a term paper for a British history class, and I studied the 17th century British mercantilist Nicholas Barbon, and early advocate of free trade and also YIMBYism for London, following the Great Fire.  I turned that into a submission too, and a bit later it was accepted at Research in the History of Economic Thought and Methodology, then edited by Warren Samuels.  That was “Nicholas Barbon and the Origins of Classical Liberalism,” and it contained some of the ideas that later evolved into state capacity libertarianism.  I recall three referee reports, not just two, and lots of follow-up work that was required.

My learning from these experiences was pretty simple:

1. I ought to keep on trying and writing more, but aiming higher.

2. My experience with early success in chess was not entirely unique, so of course this boosted my confidence more generally.

3. Try things, and make people tell you no.  Just keep on trying, in the most naive “Reader’s Digest” sense.  Most people simply won’t be doing that, so it can be a huge comparative advantage.

4. It is worth writing for people with ideas and political viewpoints different from one’s own, and they might have a real interest in what you are doing, especially if you can become fluent in their languages as well as your own.

5. I realized I didn’t have to grow up “having a chip on my shoulder,” as I saw was the case with many other young libertarians or for that matter left-wing radicals.  I figured I would and could strike out along a different path of eclecticism.

6. The publications probably got me get accepted into top graduate schools, as I was accepted everywhere I applied, basically the top six plus a few safety schools.  That validated my earlier decision to go to George Mason as an undergraduate and work on my own, rather than be stuck with more homework and more conformism at a bigger name university.  I figured that subsequent “work on my own” decisions might turn out well too, and later they did.

Here is a chain linking to my earlier posts on other early jobs.

And so that publishing job was to continue for a long time, in conjunction with my other labors of course…

Tuesday assorted links

1. The new macroeconomic thinking, some of it is good, note that about half of it runs counter to long established empirical truths that never have been overturned (as always, so much faith in that Lucas supply curve!).

2. April 3rd is Callard on Pessoa on Interintellect, Pessoa being a favorite thinker of mine.

3. Stephen Bechtel has passed away (NYT).

4. Disulfiram against Covid?

5. Seller reputation and price gouging.

6. Is it time for a new World’s Fair?

Zero price markets in everything

Had enough Zoom meetings? Can’t bear another soul-numbing day of sitting on video calls, the only distraction your rapidly aging face, pinned in one corner of the screen like a dying bug? Well, if so, then boy do we have the app for you. Meet Zoom Escaper: a free web widget that lets you add an array of fake audio effects to your next Zoom Call, gifting you with numerous reasons to end the meeting and escape, while you still can.

You can choose from barking dogs, construction noises, crying babies, or even subtler effects like choppy audio and unwanted echoes. Created by artist Sam Lavigne, Zoom Escaper is fantastically simple to use. All you need do is download a free bit of audio software called VB-Audio that routes your audio through the website, then change your audio input in Zoom from your microphone to VB-Audio, and play with the effects.

Here is much more, via Schaffin and also Michael Rosenwald.