International symposium tackles economic impact of COVID-19

International economists, mathematicians and epidemiologists are tackling some of the most perplexing and troubling economic questions of the pandemic in an upcoming symposium co-organized by a McMaster researcher and expert of financial mathematics.

The Symposium on Systemic Recovery , which takes place April 26 and 27, is run by the Fields Institute for Research of Mathematical Sciences, an international centre for mathematical research activity based at the University of Toronto, and involving researchers from all over the world.

Leading experts will analyze and consider lessons learned from the pandemic; how economies will reopen as vaccines are distributed widely; and how various countries managed the outbreak very differently, with some sacrificing lives to save the economy, and others focusing on strict lockdown and public health measures, at the cost of the economy.

“It seems clear that COVID-19 was more than just a pandemic, but rather a combination of several crises, what some researchers are calling a syndemic, or a synergy of epidemics. It was also very unequal across different countries, and we want to understand why,” says Matheus Grasselli, chair of McMaster’s department of mathematics and statistics and co-organizer of the symposium.

“On the other hand, a shock of this magnitude is an opportunity for an economic and social renaissance, rather than simply going back to normal, and the symposium will try to define what this renaissance might look like,” he says.

In the lead up to the symposium, dozens of graduate students and post-doctoral fellows are participating in a problem-solving workshop which focuses on four key problems proposed by the Organisation for Economic Co-operation and Development (OECD), the Bank of Canada, the Canadian Securities Transition Office (CSTO) and the federal Ministry of Finance.

Students are analyzing reams of data on issues related to how various countries fared during the pandemic. They are also assessing how we prepare for the next unknown crisis, possibly related to climate change or natural disaster; government stimulus and money flow from country to country; or issues related to Canadian business bankruptcy rates, which have confounded experts.

“Traditional economics measures, typically reported monthly or even quarterly, can’t respond quickly enough to the kinds of rapid changes we have been seeing in the time of the pandemic, and sometimes give misleading information. Business insolvencies in Canada dropped in 2020 while the economy contracted, contradicting our anecdotal experience,” explains Tom Hurd, a professor of mathematics at McMaster.

One project in the workshop aims to construct a non-traditional index that monitors business activity in different regions of Canada in real time, based on diverse kinds of data derived from a large number of corporate websites. A tool like this would immediately respond to effects such as a change in COVID-19 lockdown policy, he explains.

During the symposium, the graduate students and postdocs will also have the opportunity to present their findings to some of the world’s leading economic experts.  Weijie Pang, a postdoctoral fellow in the department of mathematics and statistics is working on the problem proposed by the CTSO on issues of economic sustainability.

“Although mainstream thinking suggests that the economy always returns to an equilibrium, there is concern that for countries like Canada, the policy responses to COVID-19, coupled with trade deficits, and financial flows from much bigger economies like the United States can push our economy away from equilibrium and into unsustainability, for example leading to another housing bubble or an inflation crisis,” she says.

The program will be capped off with a high-profile panel discussion hosted by the OECD on April 28, featuring former Governor of the Bank of Canada and the Bank of England Mark Carney and economist and New York Times columnist Paul Krugman.