Jew on coronavirus: now is a last chance to stop the explosion

I believe that the spread of the coronavirus is increasingly likely to be seasonal and, if true, it will have serious economic and economic consequences.

begins his latest blog post Viktor Zsiday.

Both influenza and the known coronaviruses, which mainly cause colds, are highly seasonal, for which there are several scientific explanations, but so far none are entirely satisfactory (sun; vitamin D; cold and dry air; confined spaces, etc.) . We also know that in countries with monsoons there is a peak at monsoon time, p. Ex. In Delhi, such seasonal illnesses peak in June-September, while in northern India, which also has a continental character inhabited by Indians and has a Hungarian climate, the flu season is the same in November. -March than in Budapest, writes Zsiday.

It is a logical assumption that COVID-19 is similar in nature. Also, several things seem to back this up:

• while in the southern hemisphere, even in Australia with advanced health, it has been difficult or impossible to prevent it from spreading, despite the almost complete closure in many places since March (!!),
• Meanwhile, in the Northern Hemisphere (except in the monsoon countries, where the epidemic is also rampaging!) The reproduction rate was not much above 1 even as of May, almost defenseless (the reproduction rate shows how many people transmit the disease), unlike with the 2.5-3.5 experienced in March, or even if there was a second wave, they could handle it very easily.

It’s hard to find another explanation for this other than that the spread is seasonal, so let’s say (just for example) in winter 3 the fund’s spawn rate (without intervention) is 1.5 in summer, writes the investment specialist that it assumes it’s because it explains well for most of the last half year, and similar viruses are seasonal too.

If the assumption is true, then several things also follow from economics and economic policy:

If the so-called “basic” rate of reproduction increases as we go into winter, it means that

We need to take increasingly stringent measures, and yet it will be increasingly difficult to stop the spread.

(For example, if the rate is 1.5, the spread almost stops with a generous 30% contact reduction, but if it is 3, it even propagates with a 60% contact reduction.)

It is important to note that it is not necessary for a government to close its country because

if there is enough fear of the epidemic (many dead), people will stay home on their own

(see Sweden in the spring) and the economic effects are similar to those if the country were to shut down completely.

Based on the summer experience, economic and political actors are confident and still think that with a small intervention the epidemic can be kept under control, however, if seasonality turns out to be true, then

Winter can also be very severe in economic (and health) terms.

Given that there is little chance for a serious vaccination before spring / summer 2021, Zsiday doesn’t see how the economies of developed countries would swim until late 2020, early 2021 without another deep economic flight.

It also follows from the above that

perhaps even now, the relatively warm / favorable September-October would be a last chance to stop the explosion.

The biggest question for the next 6 to 9 months is how seasonal is COVID-19. If it is strong, another wave of recession is coming, which will only have a strong rebound from spring 2021. Obviously, this would also have an impact on capital markets: new stimulus, money printing, higher budget deficits, fall dollar, etc., the expert writes in his blog post.