ANN ARBOR – The United States is in a deep recession, but the official numbers are missing something big. They don’t reflect the immense value of the sacrifices being made by millions of people who have stayed at home to stop the spread of the coronavirus.
Because we don’t charge one another for saving lives, one of the most herculean efforts ever undertaken isn’t being counted in gross domestic product. But if you stop and think about it, you will see that this is a critical omission.
If the lives that we are saving through social distancing are more valuable than whatever we were each doing last quarter, then the true value of our collective output must have risen. Unfortunately, the official measure of gross domestic product takes a much more limited view of what counts as “output,” and it hides this progress.
Our current economic troubles are certainly grave, but they’re not the result of a typical recession, which hobbles the economy so that it produces less output. Rather, the coronavirus is so destructive that it has lowered the living standards of millions of Americans, even as the true value of what they are producing is likely higher than it has ever been.
To read the rest of this column, click on https://www.nytimes.com/2020/05/14/business/social-distancing-gdp-coronavirus.html
Justin Wolfers is a professor of economics and public policy at the University of Michigan. Follow him on Twitter: @justinwolfers.