In a recent CNN Business article, Charles Riley speaks on some of the economic issues that will still be around post vaccine. He mentions four main problems, the first being the vaccine itself and the possible low effective rates. Then the supply issues that could arise from making the vaccine available to everyone else. Another topic he brings up is many people will not take the vaccine. The last is the market, and the boom or bust that biotech and Pharma stocks currently are.
While I agree with most of what Riley says, I think he takes a very pessimistic view of covid-19. While unemployment rates will likely stay high even post vaccine, I think a vaccine will open up a lot of opportunities and boost overall consumer confidence and morale. The current pandemic has been hard on many people and has had very negative effects on the mental health of the world. I think a vaccine will kickstart a reboot in market activity. While I agree there will be issues that arise, I think the economic benefits that arise from the vaccine creation outweigh anything else and is our first step in getting back to normal life. With reports of a possible vaccine approval coming before the election, it will be very interesting to see how the market and overall global economy will react to it. Another thing to watch, with inflation likely rising soon, how drug and pharmaceutical prices react to the vaccine.
https://www.cnn.com/2020/09/06/investing/stocks-week-ahead/index.html
I think the question here isn't really one of optimism versus pessimism, but one of timing. While a vaccine is certainly a prerequisite for economic recovery, I have to agree with Riley economic recovery depends more on the distribution and efficacy of the vaccine than its approval by the FDA.
ReplyDeleteIn the end, the economy will recover as fast as the population's risk of contracting the virus declines. Skepticism of vaccines, supply chain disruptions, and a lack of international cooperation may inhibit the recovery. Still, I agree with your assessment that the benefits of a vaccine outweigh any likely costs.
Correction: "I have to agree with Riley that"
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