In this Issue:

  • Vaccination Programs Need a Shot in the Arm
  • Biden’s Opening Move: Significant Stimulus
  • Sowing the Seeds of Change for Famers

Most of the time, supply and demand eventually balance. But when frictions interfere, you can end up with too much of one or the other.

Such is currently the case with vaccines against COVID-19. In some parts of the world, there is an ample supply of doses, but program frictions are preventing them from being fully dispensed. And in other parts of the world, supplies are inadequate or nonexistent. These imbalances will have an important influence on economic performance this year, and potentially longer.

The pandemic remains the most important factor in the global economic outlook. Nations that cope with it sooner and more effectively will recover more rapidly. Those that cannot contain it will lag.

Global policy makers have provided substantial fiscal support to deal with the economic symptoms of COVID-19: job displacement, small business failure, and impairment of key industries. Funds for health care have also been part of many stimulus packages, but they have been primarily aimed at caring for those already sick. The root cause of the crisis—the spread of the virus itself—has not received sufficient funding and attention.

Weekly Economic Commentary - Chart 1 - 01/22/21

As a result, vaccination programs around the world are off to a slow start. The excitement surrounding innovations in the laboratory has given way to anxiety over logistics. Production of doses does not seem to be the problem: nearly a dozen vaccines have been approved for usage in various parts of the world, and projections for this year suggest providers will manufacture more than enough to cover vulnerable populations.