The Coronavirus shock: a story of another global crisis foretold and what policy makers should be doing aboout it

United Nations Conference on Trade and Development – UNCTAD |

The coronavirus crisis is first and foremost a public health threat, but it is also, and increasingly, an economic threat. The so-called “Covid-19” shock will trigger a recession in some countries and a deceleration of global annual growth to below 2.5 per cent — often taken as the recessionary threshold for the world economy. The resulting hit to global income compared with what forecasters had been projecting for 2020 will be around the trillion-dollar mark; the bigger question is could it be worse?

The duration and depth of the crisis will depend on three variables: how far and fast the virus spreads, how long before a vaccine is found, and how effective policy makers will be in mitigating the damage to our physical and economic health and well-being. The uncertainty surrounding each of these variables is adding to people’s sense of anxiety, which is a fourth variable that will shape crisis outcomes.

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