ABSTRACT

How the Pandemic is Changing the Economy   [open pdf - 0B]

From the Introduction: "The COVID-19 [coronavirus disease 2019] public health crisis, the economic shock triggered by the pandemic, and public policy, business, and individual responses to the pandemic together have provoked the sharpest and fastest economic downturn in U.S. history. Four months after the shutdown started, many sectors of the economy remain entirely shuttered, while others are struggling to open by the fall, and still others are operating at sharply reduced levels. Both the pandemic and the fiscal policy response have ebbed and flowed, and as a result the economy remains fragile. [...] The swift and unprecedented downturn in combination with protracted closures will have long-lasting economic consequences. The global economy will suffer a recession with many emerging market economies struggling for a protracted time and trade patterns shifting. The policy landscape will look different as governments face higher debt levels and central banks face larger balance sheets and lower interest rates. And, the way economic activity is organized will likely change. In particular, the American economy will change if certain trends regarding firms' closures, labor force participation, and what it means to be 'at work' continue. [...] Understanding these changes is a first step for policymakers who will be responsible for responding to these challenges. An effective response will require renewed emphasis on antitrust enforcement, changes to the labor market to ensure that those with less education are not left behind, and support for parents, caregivers, and those with compromised health to help keep them attached to the labor market in the face of enormous challenges."

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Date:
2020-07
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Copyright:
Hamilton Project
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Brookings Institution: https://www.brookings.edu/
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application/pdf
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