{"id":16132,"date":"2021-12-17T12:01:00","date_gmt":"2021-12-17T12:01:00","guid":{"rendered":"https:\/\/www.economicsobservatory.com\/?post_type=question&p=16132"},"modified":"2021-12-17T14:55:31","modified_gmt":"2021-12-17T14:55:31","slug":"another-year-like-no-other","status":"publish","type":"question","link":"https:\/\/www.economicsobservatory.com\/test\/another-year-like-no-other","title":{"rendered":"Another year like no other"},"content":{"rendered":"\n

Newsletter from 17 December<\/strong> 2021<\/strong><\/p>\n\n\n\n

To round off our work this year, we thought we would look back over the past 12 months and highlight the ten most-viewed articles on our website. The topics covered are broad: from the effects of Covid-19 on various aspects of the economy to the rise of cryptocurrencies such as Bitcoin and Dogecoin.<\/p>\n\n\n\n

In 2022, we will continue to publish pieces on the big challenges facing UK policy-makers and the public that can be informed by insights from economic analysis and research evidence. For now, we hope you enjoy looking back over some past material.<\/p>\n\n\n\n

10. <\/strong>Externalities: why do we need coordinated public action in the pandemic?<\/strong><\/a><\/h3>\n\n\n\n

Flavio Toxvaerd (University of Cambridge) argues that with infectious diseases like Covid-19, how one person behaves necessarily affects the wellbeing of others \u2013 what economists call \u2018externalities\u2019).<\/p>\n\n\n\n

To achieve positive outcomes for society as a whole, it is not enough to rely on individuals\u2019 incentives to protect themselves. From mask wearing to getting vaccinated, externalities and their effective management remain highly topical.<\/p>\n\n\n\n

9. <\/strong>What does 95% effective mean for a Covid-19 vaccine?<\/strong><\/a><\/h3>\n\n\n\n

The flurry of announcements of new vaccine technologies in late 2020 saw much of the media\u2019s attention shift to the varying effectiveness of different brands. But what does it actually mean for a vaccine to be X% effective?<\/p>\n\n\n\n

Debopam Bhattacharya (University of Cambridge) explains that the rate \u2013 say 95% \u2013 is not your chance of staying Covid-free after vaccination: rather, it estimates how much your chance rises relative to not<\/em> being vaccinated. With a 95% effective vaccine, your chance of staying Covid-free is in fact 99.96%.<\/p>\n\n\n\n

Recent news of diminishing protection and the threat of new variants (such as Omicron) highlights the need for further research to understand the long-run effectiveness of the jab.<\/p>\n\n\n\n

8. How is coronavirus affecting the insurance industry?<\/strong><\/a><\/h3>\n\n\n\n

Mark Farrell (Queen\u2019s University Belfast) highlights the disruption that Covid-19 has caused for insurance companies, not least as they are in the business of pricing risks and a pandemic was thought of as a low-probability event. He argues that the economic fallout from the crisis may act as a catalyst for positive change in the industry.<\/p>\n\n\n\n

7. Dogecoin: what is it and does it have any value?<\/strong><\/a><\/h3>\n\n\n\n

While Covid-19 remains the most pressing challenge facing the UK and global economies, new technologies such as cryptocurrencies have also been the subject of policy-maker and research interest over the last 12 months. One such currency is \u2018Dogecoin\u2019 \u2013 a so-called meme currency that began its life as a joke but is now \u2018mined\u2019 at a rate of 10,000 new coins every minute.<\/p>\n\n\n\n

Andrew Urquhart (University of Reading) highlights the meteoric rise of Dogecoin. The chart below illustrates just how extreme the price rise of the currency has been, with volatility a clear feature of this new type of asset.<\/p>\n\n\n\n

Figure 1: Price of Dogecoin (early 2021)<\/h4>\n\n\n
\n
<\/div>\n\n