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Tuesday, December 15, 2020

Please practice good intertemporal substitution

Photo by LOGAN WEAVER on Unsplash

Via my day job as a newspaper reporter,  I learned recently about a term used by economists, “intertemporal substitution.” 

It’s a term that relates to staying safe and not getting COVID-19 just before a vaccine becomes available. So I’m going to try to explain what it means. 

Intertemporal substitution means “the decision to forego current consumption in order to consume in the future,” according to the EconModel website. “The most common example is saving for retirement.”

Economists on the internet have been applying the term to explain why people should be particularly careful now to avoid getting COVID-19, as a few more weeks of caution means you can get a shot and actually avoid getting the disease.

For example, noted economist Tyler Cowen wrote about the term in a recent blog post, “Intertemporal substitution remains underrated (COVID in Scotland).” 

After pointing to a news report from Scotland that people are taking more risks because they think vaccines will end the pandemic soon, Cowen wrote, “Of course economics suggests the exact opposite course of action, namely that when a good vaccine is coming you should play it safer in the meantime.  Beware!”

I would prefer that all of my friends from this blog stay safe until they can obtain one of the new vaccines. So please take care for the next few months.

I still periodically update my collection of COVID-19 links and refer to it often when writing my newspaper stories; in case anyone else finds it useful, here is the latest version. 

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