In response to the news of the Pfizer vaccine being announced, Miltos Makris, Professor of Economics, explains the potential for this to lead to an economic downturn. He said:
‘We cannot be anything but delighted to read the news of the creation of the Covid-19 vaccine, and welcome its positive impact on people’s lives and hopefully for the end of the pandemic and lockdowns, which have badly hit our economies. However, we must also be aware of a potential economic downturn whilst we wait for the vaccine to arrive for us.
‘Our research has revealed that the public is more likely to commit to coronavirus social distancing rules if an end-goal, such as this vaccine, is expected. This would then equate to more people staying home and a further economic downturn as the vaccine arrival date nears.
‘We analysed social distancing behaviour in a model where medical innovations, such as a vaccine or effective treatments, are anticipated by the public.
‘Model data showed that anticipation of medical innovations affects the public’s willingness to exercise social distance. When awaiting an effective vaccine, public social distancing efforts intensify as the vaccine arrival date nears and people hope to take advantage of it without having already contracted the virus.
‘In contrast, when treatment is anticipated, public social distancing is completely phased out by the time of the treatment’s arrival.
‘So, it is clear to see that as we now expect the arrival of the vaccine, the public will choose to stay home and avoid engaging with local businesses.
‘Our research recommends that each economy should now prepare for an economic downturn as the public elects to stay home and socially distance.
‘Whilst a vaccine is welcomed by all, there will also be economic consequences of public behaviour that must be balanced so as to prevent a post-vaccine financial downturn.’
The research, ‘Great Expectations: Social Distancing in Anticipation of Pharmaceutical Innovations’ is working paper published by The Cambridge-INET Institute (Professor Miltos Makris, University of Kent; Dr Flavio Toxvaerd, University of Cambridge).