In understanding the economics of COVID-19, it is useful to start decomposing the issue in four parts: (i) the public health problem, i.e., the characteristics of the disease and its epidemiology
(ii) the impact of the disease on economic activity
(iii) the connection between the two
and (iv) the economic policy solutions to what has fast become a global pandemic that threatens to destroy the economic and social fabric of modern society. As of now, the infection is spreading aggressively in Europe and the U.S, with vast pockets of highly infected areas in Italy, Spain, and several U.S. states (New York, New Jersey, California, Washington and Texas). Many of these areas are in lockdown, with only essential businesses operating, such as food stores, pharmacies and gas stations. China has, as of today, shut its borders to foreigners after a recent spike in new infections imported from abroad. Epidemiologists suggest that even after the eventual peak and slowdown, a second wave might take place.