WORLDVIEW: What can we do about coronavirus “Greater Depression”?
More than 2 billion people – including the entire population of India – are in lockdown. This is an unprecedented situation. Never before has the world so quickly and dramatically put itself on ice. Stores are closed, factories are idle, and hundreds of millions of jobs are gone.
Hopefully, this is temporary. In China, even the city of Wuhan is slowly reopening, and activity in Hubei province is picking up. Many economists believe that the downturn, while painful, will be temporary. The consensus seems to be a 12-14% decline in global GDP in the first and second quarters, with things picking up quickly once the lockdowns are lifted mid-year.
But there is a very real danger that the coronavirus crunch is anything but temporary. As lockdowns stretch into weeks, and perhaps months, the economic damage could easily become permanent.
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