Insights / Podcast episodeJul 30, 2020

Episode 16: How to Price a Vaccine?

Under both pandemic and economic stress, how will the market perform when it comes to setting the price for effective treatments or a cure?  Katherine Baicker and Richard Thaler explore the economic forces that drive production and distribution of necessary goods like COVID-19 tests, and importantly, a vaccine.


Unedited Transcript

TESS VIGELAND: Pharmaceutical and biotech companies around the world are racing to find a vaccine. One is already undergoing testing in some 30,000 volunteers.


But if and when the magic bullet is found, what’s it going to cost? And who’s going to pay?

This is Pandemic Economics– a podcast about the global impact of COVID-19, from Stitcher and the Becker Friedman Institute for Economics. I’m Tess Vigeland.

EDUARDO PORTER: And I’m Eduardo Porter. We’d been invited to have conversations with University of Chicago economists.

TESS VIGELAND: In this episode, I talk through the vaccine pricing conundrum, with Katherine Baicker– dean of the Harris School of Public Policy and a health economist and 2017 Nobel Laureate Richard Thaler– professor of economics at the Booth School of Business.

Well, Dick Thaler, I’d like to start where all interviews should start, really, which is with toilet paper. You wrote an op ed for The New York Times back in May, where you talked about the concept of price fairness in the wake of all the shortages that we saw of toilet paper, hand sanitizer, even pasta, yeast. We’ll get to how this relates to a vaccine in a minute, but share your findings with us of how that happened and why.

RICHARD THALER: To tell the story, we have to go back to 1984, ’85 when I was spending a year in Vancouver, working with my friend Danny Kahneman, psychologist, and Jack Knetsch. And we wrote a paper about what people think is fair in the marketplace.

And the most well-known example from that is the morning after a blizzard, a hardware store raises the price of snow shovels. And we asked people whether they think that’s fair. And 80% of the respondents said this was unfair. And the details of the example matter not a bit.

Interestingly, economists would all say this is fair. So the general principle is that people don’t think it’s fair to use the price mechanism to deal with shortages, especially for things that are needed.

TESS VIGELAND: And morally, that makes sense.

RICHARD THALER: Yeah. And I should say that our paper doesn’t attempt to say what is fair. We’re not philosophers. We were just trying to find out what other people think is fair. Because if you’re a business person, for example, this is good to know. Because you get in trouble when you violate these norms of fairness. And that’s what we saw in the early days of the pandemic.

TESS VIGELAND: So Kate, what’s wrong with fairness? Why does this bother economists?

KATHERINE BAICKER: For the record, I’m not against fairness. But why Dick’s work is so important and highlights something so important for us to understand is a shortcoming in the way we think about the best way to allocate a limited number of shovels or rolls of toilet paper or things that are in short supply.

And economists get excited about using the price because the goal is to line up the limited shovels with the people who need the most. And the people who are willing to pay the most for them ought to be the people who value them the most. But the problem is that people have limited resources.

So someone who really, really, really values the shovel may not have enough money to pay to reflect that value. So just allocating it based on who can pay the most magnifies income inequality and disparities in resources. That mean that what people are willing to pay doesn’t show how much they really value it.

So you need some other mechanism. And this fairness principle explains why we don’t see companies taking advantage just of the price to figure out who to sell the last roll of toilet paper to. Which also, by the way, would give them the most revenue. So it’s sort of surprising to economists that you don’t see higher prices for shovels and toilet paper when they’re in short supply. But Dick’s work with colleagues gives us a really good explanation.

TESS VIGELAND: But doesn’t that also somewhat depend on what you have a short supply of? I mean, toilet paper, pretty much, everybody needs that. But Dick, in your op ed, you also talked about extending this to, for example, PPE– protection equipment. That there is a hierarchy of need there. Where did fairness play out in that shortage?

RICHARD THALER: Well, again, as Kate points out, the prescription that we should just let the price mechanism allocate the resources depends crucially on the assumption that willingness to pay is a correct measure of the value of giving that buyer the good. And let’s suppose, we’re talking about PPE.

The people who might value that the most are Wall Street firms or billionaires who say give me 20,000 masks because you never know. And even within the health sector, rich hospitals that cater to wealthy people might be willing to pay much more than the hospital that’s dealing with a poor segment of the population. And we know that it has hit the poor much harder.

And the same would go with people who work in food processing plants. They are arguably, the people who need the PPE the most. But are their employers going to be the ones who win the bidding contest against the hedge funds?

KATHERINE BAICKER: And it does matter what the good is. We feel differently about PPE and food and basic necessities than we do about luxury goods. And we ought to feel differently about that.


KATHERINE BAICKER: I don’t see a lot of people complaining if diamonds go to the highest bidders. But we have a moral responsibility that we feel differently about for things like food and basic health care. And then there’s also, the spillover effect that your coronavirus can very well be my coronavirus, and we need to think at a social level about some things, in addition to that social preference or moral justification for access to certain kinds of goods and services that we think of as merit goods.

TESS VIGELAND: So Dick, then, let’s then draw that line from this concept, kind of featuring toilet paper, to now a vaccine for a global pandemic. Do or should the same rules apply? Especially in terms of fairness?

RICHARD THALER: Well, I think the same rules, meaning the same preferences, are certainly going to come into play. So let’s suppose some drug company comes up with either a vaccine or a cure or a very effective treatment, and we need billions of these. If it’s a vaccine, we need many billions.

Well, if we go by willingness to pay, then the rich countries will win the bidding battle. And within the rich countries, the rich people will go first. And, again, that might not be the order in which we would want to do it. But we could make the argument that the people who should get this drug first or the vaccine first are health care workers and citizens of the countries where the virus is hitting hardest at that moment. And if we go by willingness to pay, it will never reach the millions, hundreds of millions of people that are living in very poor countries.

TESS VIGELAND: So in a global pandemic, how do you then figure out a way for distribution to happen in a fair way? And for pricing, in particular, to happen in a fair way? Let’s just talk globally first. And then, Kate, I want to ask you about some specific vagaries of the United States health care system. But Dick, you explore that on a planetary level, first?

RICHARD THALER: Well, look, this is something that we’ve gone through historically with lots of different drugs. And it’s fair to say, we haven’t figured it out. And the key thing about a drug is that the cost of producing it is almost always, a very small fraction of what its value is to consumers or to health care providers.

So an example is there was a drug that cured hepatitis C that was introduced a few years ago. And was sold for $80,000 per patient.


KATHERINE BAICKER: Per course of treatment.

TESS VIGELAND: Per course of treatment, OK.

RICHARD THALER: That drug probably cost less than $100 to produce. I’m making that number up, but that’s probably, the right ballpark. But its value was certainly much bigger than $80,000 because hepatitis C is a really nasty disease. Very expensive to treat. But you can see, there’s a conflict here.

And as a result, we haven’t figured this out. Because something like 80% of the people with that disease have not received this treatment. So there we are.

KATHERINE BAICKER: But that raises a real dilemma, which is we have to care about fairness and about access, even when people can’t afford the drug. But we also care very deeply about the invention of new drugs. And thinking about the cost of all of the research and development and all of the failed drugs until you get one that works means that if you only paid the $100 that it takes to produce the next pill or the next drug dose, you’re not going to have a lot of invention. You’re not going to have people investing the sometimes billions of dollars that it takes to bring a new drug from idea to market.

And we need to think about public policies that bridge that disconnect. So that people have access at a price they can pay broadly around the globe. But we also get this stream of new medicines that we’re all counting on, which is particularly acute right now. And that probably means having some government policy to pay when people can’t. And ensuring that the price splits the surplus that Dick is outlining in a really fair way.

And what I mean by surplus is the difference between what it costs to invent and bring to market and produce a drug and the enormous value that it can produce for society. You don’t want to price the drug so high that all of that value goes to the drug manufacturers. And you don’t want to price the drug so low that there isn’t enough value left to drive innovation. And figuring out what that fair middle price is, is– as they said– something that we have not figured out systematically yet.

RICHARD THALER: Yeah, this reminds me of a conversation I had years ago with the CFO of a large drug company. And I said, what are you guys going to do if you find a cure for AIDS? So this is probably, 25 years ago. And the CFO said, well, I don’t know. I don’t know how we would do the pricing. And in all candor, financially, it would be better for us to find a cure for baldness.


RICHARD THALER: And the reason is– for reasons we’ve discussed– you can charge, pretty much, whatever you want for a cure for baldness. And you can also charge whatever you want to men to make sure they can have sex. But cures for diseases that affect lots of poor people present a problem.

And we already are seeing the people who are in the vaccine race have announced very different pricing policies. In part, depending on whether they’ve received government funding for their research. So those who have gone in on their own, think they owe their shareholders a big payday. Those who have gotten government money, think that they owe it to sell it at cost.

And here’s a tough one. Let’s suppose we have two equally effective vaccines. Or let’s say we have one that’s a little bit better than the other, but it’s going to cost way more. Who’s going to make that call?

TESS VIGELAND: Wow. Well, Kate, I mentioned that I wanted to get into some of the vagaries of this debate under the US health care system. And we’re in this country where unlike a lot of others, particularly developed nations, where health care is managed by the federal government– a universal health care– we have this for profit system that, for most people, is tied to their employment. And because of that, costs vary depending on all kinds of things– [INAUDIBLE] your insurance company, your provider. So how much more complex is this vaccine pricing debate here because of those factors?

KATHERINE BAICKER: Everything is more complicated here because of those factors. And our system is so patchwork and the pandemic is an extreme example of where one person’s access to medicine, very much, affects the well-being of everyone else. For the most part, for other kinds of health care treatments, the person who gets the treatment is the one who’s most affected by it.

We like to tell stories about how covering the uninsured makes everybody better off. I think the data suggests that covering the uninsured makes the uninsured better off. And that’s an important public policy priority. But for the most part, your health care affects your health, first and foremost.

But contagious disease is the big exception. And in most times in our history, that’s a small part of health care. But right now, that is obviously the overriding health concern in the US and around the globe. So I think there’s a very strong case to be made that our policy about what we’re paying for vaccines and how we’re making sure that there’s adequate access to them has to be coordinated in a much more central way.

So I could see that being entirely outside the normal health insurance system. I could see the federal government having much more control over those prices than usual. Or having insurers band together to promote access to the vaccine. Because what happens to one person is going to have immediate spillover effects across family members, across communities. And the patchwork system is a real impediment to getting good policy.

RICHARD THALER: And if I could add something to that, Tess, which is vaccines and treatments are a ways off. And we don’t know– is it six months or years? But what’s happening in real time now is a shortage of tests. And there’s a very uneven allocation of tests.

So the professional athletes who are starting to resume their activity are being tested every day.

TESS VIGELAND: Right. No shortage for them.

RICHARD THALER: Our university, like every university, is trying to figure out how to safely reopen. We would love to be able to test every student, faculty, and staff member. Same is true of opening the schools, which has become a political hot button. It would be much easier to open the schools if everybody could be tested very frequently with immediate results.

And it’s pretty clear to me that we are not offering test manufacturers the right incentives to innovate on that front, for exactly the same set of reasons.

KATHERINE BAICKER: You’re bringing up a really important distinction that we should draw out, which is in the short-term, we’ve been talking about who pays what as a mechanism for moving the same goods around to different people. But in the long-term, if prices go up, you actually get more of the goods that you’re trying to allocate. People can produce more when there are more resources devoted to doing it.

When you have more money going to vaccine development, you get more shots on goal of different types of vaccines. When you pay more for PPE, you can get more of it manufactured. So you want to think about the supply as reacting to the price. Which, again, in my mind, goes back to allowing the price to go up so that you get more of the goods, but having redistribution through public policy or government so that it doesn’t shut out low income people.

And some combination of those, to me, seems really important for making sure that we not only get things to low income people, as well as high income people. But that we have the things we need.

RICHARD THALER: Yeah. And one way of achieving that that has theoretical appeal is for the government to buy stuff at a price high enough to induce it, and then distribute it in an efficient way. Now it’s easier to say that than to do it. And lots of people have talked about prizes as a way of stimulating innovation, which is a very old idea.

There was something called the longitude prize, which a bunch of European countries offered up money to anybody could help a ship captain figure out where they were at sea on the East-West. North-South was easy. East-West was hard. So they said, all right, here’s X dollars to the person who will figure this out.

And it would be nice if we were doing that with treatments and cures for COVID. There are some of these prizes, but the amounts of money are trivial compared to the potential benefits. If you think in this country, we’ve already spent trillions of dollars in trying to mitigate this. And think of a $1 trillion prize for one pill that solves this. You’d have a lot of people working on that problem.

TESS VIGELAND: Sure would. I might even start working on it.

KATHERINE BAICKER: That’s right. You never know. An alternative version of that is a pre-commitment to buy doses of the drug if it can be demonstrated to be successful, whether it’s a treatment or a vaccine.

And that has the advantage that we would actually like lots and lots of people to be working on different ideas for vaccines and treatments. Because you never know if any one is going to work. You’d have to have an enormous prize, given the uncertainty. If it only has a 1% chance of working and you’ve got to invest billions of dollars to test it out, the prize would have to be like a trillion dollars– as Dick mentioned. And it’s hard to imagine doing that.

Whereas, if you say we guarantee we’re going to buy this or we’re investing upfront whether it works or not, especially for things that are quite uncertain to work, making that public investment upfront, you can do that multiple times for multiple different approaches to a vaccine. And we’re all much better off if people are trying different mechanisms of action, different approaches to the treatment or vaccine.

Because who knows if any one of them is going to work out. You want multiple shots on goal. And you can pay for that if you cover a bunch of those fixed costs, and then the odds are something’s going to pan out.


TESS VIGELAND: Coming up, the fairness question applied to a global vaccine developed by private industry. What would Jonas Salk do? Does that matter?

EDUARDO PORTER: Stay with us for more Pandemic Economics, in just a minute.

TESS VIGELAND: I want to turn to a reasonable sum for the world to pay to basically, tame the pandemic, and what that would cost the individual. Now Kate, you said in The New York Times that $150 billion of investment, $500 per vaccination per American is not unreasonable. So now we’re down to $150 billion from a trillion, but what would be unreasonable? And what factors go into that determination?

KATHERINE BAICKER: I want to be clear on the value of a potential disconnect between what an individual pays and what is paid, which sounds like a semantic difference. But it’s important that you could have the government buy a bunch of doses, and then allocate to individuals, taking into account their ability to pay.

TESS VIGELAND: OK. Again, here in the US where it’s a patchwork, maybe universal health care wouldn’t be as problematic?

KATHERINE BAICKER: Yes. Somebody needs to pay enough to generate the invention, development, and manufacture of an effective vaccine. Now who pays that is the key question in fairness. And I think having some redistribution, meaning the government’s kicking in money that’s ultimately funded by higher income taxpayers so that lower income people get access to the drug, that seems crucial. But that doesn’t mean that somebody doesn’t still need to pay.

RICHARD THALER: Yeah. And health care providers are willing to pay for, say, treatments that save them money. So we have this drug Remdesivir, which, as a treatment, it’s kind of like a B minus.


RICHARD THALER: Yeah, it helps. It shortens the stay in the hospital by, maybe, four days. And if you squint, it might save a few lives. And, again, it doesn’t cost very much to produce. It costs a fair amount to develop.

But if you think about, say, Blue Cross Blue Shield or Medicare, four days in the hospital is a lot of money. And if the drug saves four days in the hospital and that’s $25,000, they’re happy to pay quite a bit of money for a drug that isn’t all that great. So what would they pay for a drug that as soon as you’re tested positive, you’ve got this drug and it all went away? A lot.

But then we’re back to the question of, who’s going to pay for the person who is uninsured? And we know there are more of those than ever, since so many people have lost their jobs.

KATHERINE BAICKER: Right. And we do have this patchwork system that means there are a lot of different pools of money. And how to effectively draw them in is going to be a public policy challenge. But it seems secondary to getting a vaccine or a treatment that works.

You can have people who are uninsured gain access through Medicaid. And there was some expansion of Medicaid eligibility associated with the change in public policy around COVID. You can also have people eligible for health insurance exchange policies, and just make sure that everybody is covered by something. And the uninsured could still have access through a public program to the vaccine.

But the fact that insurers are already paying a lot of money for COVID care means there’s money available through that mechanism, as well, which is exactly what Dick is pointing out. That you’ve got government funds that can focus on redistribution and on Medicare populations who are already covered by a government program. You’ve got private insurers who are already paying to care for huge swaths of the population.

There is a lot of upside benefit to having an effective treatment and a vaccine. And there’s plenty of surplus to go around. By which, I mean everybody will be better off when there is a vaccine or effective treatment if we get the pricing and distribution mechanism right.

TESS VIGELAND: I feel like in this debate over pricing for a COVID vaccine, you constantly will hear the comparison to Jonas Salk, who, of course, created the polio vaccine. And then, as the story goes, gave it away for the good of humanity because I think– what did he say? You can’t patent the sun, I think? It was more complex than that, of course.

But part of the argument was that people had already donated millions of dollars to the effort to find the vaccine. So that was the price that they paid. Why shouldn’t that model rule in the case of COVID, as well?

RICHARD THALER: One of the problems is that some of the promising vaccines have been developed exclusively in the private sector, with funding from investors who are betting on lottery tickets. So if I’m a biotech startup and I’ve got no revenues and I’ve got a, let’s say, I’ve got a treatment for COVID. My investors are hoping to score big on this. Because so far, I’ve got nothing.

Whereas, the Oxford drug has received lots of government funding. And I think they’re in the deal with AstraZeneca. And they’ve announced that if their vaccine is the winner, they will be distributing it essentially, at the cost of production. So with a price that will be asked will depend a lot on who the winner of the prize is.

TESS VIGELAND: Huh. And then to add on top of that, what happens– at least here in the States– if a vaccine is not found in the US? In other words, what if, say, a German company gets to it first? Or you mentioned AstraZeneca? Or how about this– what if a Chinese pharmaceutical company gets it? What happens to pricing then?

RICHARD THALER: Well, if it’s a Chinese company, I can think of a billion people or so who will be ahead of us in the line. And we’ve already announced that the government has gotten a commitment for 300 doses of a vaccine that will go just to us. So it will be complicated. I can’t think of a polite term to describe what will happen.

And it will not be a well-coordinated effort. And it’s interesting that the WHO is under attack right now. Because God knows this is the time that we would need them. And you would like some kind of rational allocation that would protect the people who would benefit from it most, as opposed to who would be willing to pay the most. At least, as judged by somebody. And right now, there’s nobody to make that determination.

KATHERINE BAICKER: And certainly, a global pandemic ought to bring home how interconnected our economies, our health, our well-being is across national borders. Clearly, geopolitics plays an enormous role in what’s going to happen with that. And economists are not great at understanding political realities. And that’s why we’re economists and not politicians. But it does seem as though we are nowhere near optimal investment or optimal allocation that would come out of any rational economic model.

RICHARD THALER: Tess, think about how much airlines would be willing to pay for this to all go away.

TESS VIGELAND: Interesting.

RICHARD THALER: Right? And hotels and restaurants. They’re just all suffering from this, never mind the disease.

TESS VIGELAND: So why isn’t there a suggestion that they become involved in this? I mean, I think that’s very intriguing, the idea that industry giants would– that it would be helpful to their balance sheets for us to get a vaccine. So why not play a part in that happening?

RICHARD THALER: Well, unfortunately, the checkbooks of US airlines are, pretty much, empty. So that’s a start.

TESS VIGELAND: That’s true.

KATHERINE BAICKER: But that’s where you get to government investment, like, government money comes from industry and taxpayers. And it’s a way of pooling resources for something that affects everybody’s well-being.

But it raises a challenge that brings us back to where we started in terms of fairness. There are billions of people around the world who are desperate for a vaccine or a treatment. But only some of them have resources to pay for it. And if you say morally, who has resources should have nothing to do with it, that kind of punts on the reality of where the money’s going to come from to develop the vaccine.

As soon as we start saying– I keep saying vaccine, but I mean vaccine or effective treatment. Either one would dramatically lower the hardship associated with this disease. Somebody has got to pay a lot of money to get us this magic treatment that will then benefit everyone around the world. Because eventually, there will be enough supply for everyone to get doses. But if you take into account the reality that the money has to come from the people and places and entities that have money, that, very much, affects where the drug starts off. And I think it seems unrealistic to think that it’s going to bear no relationship to who gets the first doses.

And going back to the great example of treatments for hepatitis C, the first drug cost $80,000 per course of treatment. As soon as a second drug came on the market, the price dropped down to $40,000. Eventually, these drugs will be generic or bio-similar, and then the price will be very low. So there is a upfront payment that goes along with the development or invention of something new.

But we ought to set up a system where that’s temporary. Where it’s big enough– it’s a big enough prize that people invest in the invention and the development. But then the surplus gets disseminated across the whole population. Eventually, everybody gets access.

The problem is that with something like a deadly pandemic eventually is too long to wait. And so we need to think about how we speed that up. Both how we speed up capacity to manufacture the new thing, but also how we speed up the dissemination across the globe. And that requires a concerted and coordinated public policy. But the reality is that the money does have to start off somewhere.

RICHARD THALER: So let me just say one thing that is a little more optimistic than Kate and I are sounding.


KATHERINE BAICKER: Oh, please. Please.

RICHARD THALER: It is a fact that there are at least 100, probably more, companies that are making investments in vaccines and/or treatments. And I have talked to a couple of the CEOs of these companies. And what they’ve told me is they don’t expect a huge payday on this. And why they’re doing it, well, one is they’d like to be heroes. But another is they’re hoping that if they come out as good guys on this and save the world, they might get treated more kindly by governments and regulators down the road.

So I think we are seeing lots of investment. Maybe not as much as we would like, but more than we’ve been having would suggest there would be. And it’s because companies think there will be some kind of payoff. Maybe it’ll be a Nobel Prize, and maybe it’ll be less scrutiny from regulators, but it will be something. Though, not the trillion dollars or $10 trillion that society should be willing to pay for something that would, say, poof, this is gone.

KATHERINE BAICKER: And that goes right back to where you started with the snow shovels. Economists, being the callous, heartless creatures that we usually are, we’re baffled that Home Depot wasn’t charging $100 a snow shovel. But, of course, Home Depot wants us to keep coming back. And can’t afford for people to think of them as the bad guys. They’re the good snow shovel guys.

And so that is a cause for optimism, and we ought to be thinking about how we reward that kind of behavior appropriately so that we get not only this vaccine, but the next vaccine and the one after that. But the court of public opinion can be a really valuable tool in promoting good behavior.

TESS VIGELAND: So then, I guess, my final question for both of you would be– and Kate, you dealt with this a little bit already– but snow shovels, toilet paper, hand sanitizer, PPE, even onto the hep C example that both of you have now cited– none of that is a global pandemic. And this is something that is killing people across the world. It has literally shut down the world economy. Should this be the one exception where people shouldn’t be paying different prices and there should be universal access?

RICHARD THALER: Well, I think that would be ideal. But realistically, the very poor countries of the world will not be first in line. And that’s just a fact of life. That’s been true for all drug innovations.

But I think we can at least hope that because of the pandemic nature of this, even if they’re not first in line, in this case, more countries will receive the treatment or vaccine at something close to the cost of production.


KATHERINE BAICKER: Yes, this seems like a clear case where we are all better off if everyone gets the vaccine. And making sure that cost is not a barrier around the globe ought to be not only a moral, but an economic priority. But that doesn’t mean that we don’t have to find the money to develop the drug, to produce the drug. Higher income countries are clearly going to have to pay for that because lower income countries can’t. So we still need to find a mechanism to get the dollars or the euros over to the invention, the development, the manufacture of the new vaccine or there won’t be a new vaccine.

RICHARD THALER: Well, and we also have to talk about the political willpower. So right now, Congress is unable to agree on money, even for testing, right now. And how much are they going to be willing to pay to save lives in Brazil or Africa? I’m less optimistic about that.

KATHERINE BAICKER: But the good news is the invention can happen in one place. And those citizens will then, realistically, be first in line– as you point out. But because the marginal cost is very low of manufacturing these things once the invention has been induced, you can then get the drug into the hands of people around the globe for very low marginal cost. And that’s the challenge here.

We’ve gone almost this whole time without saying marginal costs and fixed costs, which you should be super proud of. But this is a classic example where there are huge upfront costs, and then trivial per dose costs. And so what we’re struggling with is how to finance those upfront costs.

But it’s good news that the marginal cost is very low. Because that means we can get the drugs to India and China and around the world at an affordable marginal price if we figure out how to get the investment up front.

RICHARD THALER: Though, as Kate knows, sometimes the delivery costs are greater than the cost of the drug. If the drug has to be refrigerated or worse, frozen, then getting it to remote places in the world can be pretty expensive. But the principle is absolutely correct, that the cost of producing these drugs will be very small compared to their benefit. And the upfront costs may be very high, and that’s the problem that the world has to figure out a way to solve.


TESS VIGELAND: Next time, we’ll talk about the issue of endless uncertainty. We’ll speak with Nobel Laureate Lars Peter Hansen and Constantine Yannelis of the Booth School of Business about this destabilizing reality. What it means for policymakers. And one strategy for navigating a world in flux.

EDUARDO PORTER: Pandemic Economics is produced by the University of Chicago’s Becker Friedman Institute of Economics. Our producers are Devin Robbins and Dana Bialek. Our executive producer is Ellen Horne. Production and original music by Story Mechanics. Pandemic Economics is part of the University of Chicago Podcast Network. I’m Eduardo Porter.

TESS VIGELAND: And I’m Tess Vigeland Thanks for listening.