Andrew Sheng: New Data, New Systemic Analyses for Novel Pandemic Crises

The COVID-19 crisis is stress-testing not just economies, but our economic paradigms and analytical tools. The 2008 crisis revealed that financial systems are networks, and COVID-19 showed how viral contagion and conventional tools (monetary creation) plus lockdowns can bring on recession, depression or conflict. Current single-minded focus on flows and monetary creation to deal with financial crises have ignored second-order effects of social inequality, balance sheet fragility, the rise of Precariat, gig economy and job/income vulnerabilities and social/political polarization exposed by the lockdown. Our current statistical system has good data on financial institutions and large corporations, but little data on small businesses and Precariat and how they are linked and interact. So central bank “whatever it takes” helicopter money will save the Big Boys, but ignores the effective transmission channel to the masses. We may end up exactly like post-2008: concentration is worsened as the 1% knows how to capture QE. We have to do this differently.
This is a whole-of-society effort where we need the young to re-image the future, understand the data of the vulnerable, offer novel solutions and re-connect the whole. Andrew Sheng invites YSI scholars to crowd-study the financial condition of those most vulnerable to lockdown, drawing upon diverse data sources to build a more composite picture of how different systems are inter-connected, interdependent with contingent reflexivities. Post-COVID economy and society is bound to be different, while reconstruction of post-COVID economics will require conscience, imagination, and input from the young.