Looking at the Dark Underbelly of the Market System with Anton Korinek

As an associate professor in the Department of Economics at the University of Virginia, Anton Korinek studies macroeconomics and international financial stability. He shares details of his work and his input on the COVID-19 situation. Press play to discover:

• What "externality" means in economics, how it affects each of us every day, and why it's important
• How the COVID-19 situation has impacted the economy and in what ways in may continue to do so
• What types of externalities have arisen as a result of COVID-19

The study of economics rests on the premise that the market economy is a very powerful force in society—one that has enabled much progress, but has also been known to lead society astray from the greater good. The force referred to here is called an externality.

Korinek explains that externalities arise when people who engage in economic activity do so in a way that affects others without their consent. Consider, for example, a company that dumps waste in a river which runs through your property. Or anyone who produces greenhouse gasses which contribute to global warming. These are externalities, or forces which produce a negative impact on individuals and society at large.

Most recently, Korinek has been asking what kind of externalities have arisen from the COVID-19 situation. Mask mandates, social gathering restrictions, economic limitations…these are just a few topics that have become a serious issue of debate in recent months. Many people believe that these mandates infringe upon our civil liberties, but even more are disturbed by a seeming lack of evidence to support the idea that these restrictions are indeed helping the situation. As an economist, Korinek weighs in on these matters.

He talks about the ways in which his opinions and viewpoints have changed over the course and development of the COVID-19 situation, the economic cost and effect of social distancing mandates, and what he thinks is likely to happen in the near and long-term future.

Tune in, and check out www.korinek.com for more. Available on Apple Podcasts: apple.co/2Os0myK