Wednesday, March 11, 2020

Coronavirus, Economy and A Fear Frenzy Behaviour


The outbreak of coronavirus has made the whole world afraid of the contagious effect of this virus. In a short span of time, this virus has travelled to almost half of the world. Coronavirus neither has the highest mortality rate nor the highest reproduction rate (R0); still the world has pushed the panic button. This article discusses whether the world needs to have knee jerk reactions like this to the coronavirus pandemic or not?

The Chinese economy is already under huge pressure due to the ongoing economic slowdown and the escalating trade war between the United States and China. At the same time, the transmission of COVID19 virus in China has reached a contagious level. As per many news reports, China has to insulate the whole state of Hubei from the rest of the China mainland. This indicates that the situation in China is grave and worrisome. If it continues for long, it will cost the global economy in general and Chinese economy in particular. There are a few signals which indicate the eroding conditions but those signals are still very weak and will take longer to clearly indicate but it is certain that the world supply chain will be hit adversely due to spreading fear caused by the COVID19 pandemic.

India is not insulated from whatever is happening in China and other countries. A fear factor has already started churning. It is certain that the Indian economy will also have to bear the brunt of this global pandemic as the cases of COVID19 infection are increasing and the numbers of affected states are also increasing. Considering the very high volume of international passengers arriving in India, this virus may spread quickly. However, at this juncture of time nothing can be said with 100% accuracy about what turns this pandemic is going to take; particularly in India.

Because of the peculiar nature of the Coronavirus caused influenza, the movement of goods and human capital will be adversely affected across the globe and hence the human confidence at global level will dip down. The scary news pieces relating to coronavirus have made humans psychologically afraid and that is very natural. This presumed fear does not seem to be uncalled for if the market is taken as a barometer. The oil and stock prices are now free falling across the globe. In India, Sensex has fallen by more than 5000 points in a few days. And most importantly, none knows where it will all stop? However, there is a pertinent question in this regard. Does the world need to have knee jerk reactions like this to the coronavirus pandemic?

From Table No – 1, it is clear that the mortality rate of the coronavirus induced influenza is the lowest among all the virus induced diseases in the last two decades. Till now total 1,15,331 persons have been infected and 4,021 persons have died from this virus as on 10th March 2020. However, it is too early to arrive at the final mortality rate of the coronavirus as the outbreak of coronavirus is expected to stay longer.
According to Table No – 2, in terms of reproduction rate (R0), coronavirus is contagious but there have been many other viruses and diseases that have far higher R0 (Eisenberg, 2020). Measles has R0 in the range of 12 to 18 and smallpox and polio have R0 in the range of 5 to 7. So in terms of R0, coronavirus is not the most contagious disease. But of the outbreaks by other viruses in the last two decades, the coronavirus has the highest upper band of reproduction rate. Perhaps that is the reason because of which till now coronavirus has travelled to almost half of the globe! There is no continent with a significant population where this influenza has not reached so far! So the possibility of this virus reaching most of the countries in the world cannot be ruled out and that situation for the world would be very difficult to handle.
As of 10th March 2020, out of a total 1,15,331 cases, 4,021 persons have died from the coronavirus infection (Worldometer, 2020). A look at Table No – 3 about the daily deaths from different diseases in 2017, it is crystal clear that the numbers of deaths every year from many communicable and non-communicable diseases were far higher than that of the death from the coronavirus in the last few months (Ritchie & Roser, 2018). However, it is too early to predict the final number of mortalities from the coronavirus anywhere in the world irrespective of the prediction models, data reporting and transparencies as well as the healthcare system at disposal. But considering the low mortality rate (till now), it is expected that numbers of deaths wouldn’t be very high (OWD, 2020). However, it is also quite possible that the mortality rate may increase in future as the pandemic progresses.
From Table No – 4 daily deaths from different diseases for many countries, the highest numbers of daily deaths in China at 28,036 followed by India at 25,270 in 2017. Similarly, depending on the population, every country has witnessed very high numbers of deaths from different diseases. So if the number of deaths from the coronavirus is compared with other diseases, it would be a small fraction. In India, as of 10th March, there are just 44 coronavirus cases and no deaths. However, India is still at the early stage of coronavirus infection and numbers will increase for sure.

So, on account of overall mortality rate as well as the daily death from different diseases, the coronavirus is not the deadliest one. Even the reproduction rate (R0) of COVID-19 is not the highest among all the diseases but among all the viruses induced outbreaks in the last two decades, coronavirus has the highest upper band of the reproduction rate and the spread of this virus has been the fastest and widest. So it is perhaps the most infectious influenza in written human history but not surely the deadliest one. But from the pattern of its spread, it is clear that this virus is going to affect the world like never before.

As far as the world’s knee jerk reaction to the coronavirus pandemic is concerned, at this juncture of time, it seems that the reactions of the world are not completely uncalled for but the way the panic button has been pushed, it seems that the fear is more than worth. However, it is quite possible that this outbreak of coronavirus may really prove contagious and deadly to the world because the way China is withholding information about this virus and WHO has been less concerned, it must make everyone alert on this account.


  • Eisenberg, J. (2020, Feb 5). R0: How scientists quantify the intensity of an outbreak like coronavirus and predict the pandemic’s spread. Retrieved from The Conversation: 
  • OWD. (2020, March 10). Coronavirus (COVID-19) Cases. Retrieved from Our World in Data: 
  • Ritchie, H., & Roser, M. (2018, February). Causes of Death. Retrieved from Our World in Data: 
  • Worldometer. (2020, March 11). Coronavirus. Retrieved from Worldometer:

- Rajeev Kumar Upadhyay

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