Coronavirus: The Economy Holds Its Breath
Dariusz Standerski & Aleksandra Wojtowicz. Translated by Irina Menshaeva
- The pandemic we are dealing with now will change the global economy. Due to its unprecedented magnitude, it is a source of a macroeconomic shock.
- Its scope and power of influence can cause changes in the market structure, competition rules, and the system of law. One might have an impression that the world is holding its breath.
- As the example of Italy demonstrates, predictive models are not effective under conditions of the pandemic.
- Coronavirus is an external factor. Therefore, with the decline of the coronavirus pandemic models will return to their stability in the long-term perspective. However, the way they will reach this stability depends on the way the virus will retreat. It can either happen rapidly (as it was with the Spanish flu) or as a result of a process that could last several months.
- Both scenarios imply an introduction of some rescue packages in the process of pandemic, as well as stimulus packages after its ending (such packages have been already announced by many countries). It is difficult to imagine a recovery of economy without an introduction of such packages.