Category Archives: coronavirus

Is the coronavirus recession of 2020 unprecedented?

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April 8, 2020 — A reporter asks: Can this situation be compared to the Great Depression? Or any other historical parallel that you can refer to?

My answer: The coronavirus recession this year is set to be worse than the Great Recession of 2007-09, is unprecedented in its suddenness, and is likely to show the deepest economic trough since the Great Depression of the 1930s.  The most natural precedent is the global influenza pandemic of 1918-20, which has been estimated to have caused negative growth of 6% in the typical country, in a recent paper by Robert Barro, Jose Ursua, and Joanna Weng. read more

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Black Swans Like COVID-19 are Predictable

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March 30, 2020 —   Events like the COVID-19 pandemic of 2020, the US housing crash of 2007-09, and the terrorist attack of September 11, 2001, are called “black swans”: in each case, few people were able to predict them reliably, at least not with precision.  But they were known unknowns, not unknown unknowns.  That is, in each case, knowledgeable analysts were fully aware that such a thing could happen, even that it was likely to happen eventually.  They could not predict that the event would happen with high probability in any given year.  But the consequences of each of these events were severe, and predictably so.  Thus, policymakers should have listened to the warnings and should have taken steps in advance. They could have helped avert or mitigate disaster if they had done so. read more

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Interview on the Coronavirus Recession

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Interview by Economychosun, South Korea, March 24, 2020

  1. Q: I’d like to know your opinion on the global economic impact of the Covid-19 crisis.  Do you think the recession is a fait accompli?

JF: We are already in a global recession, even though it will take a bit longer for the most relevant economic statistics to confirm that. It is exceedingly rare that economists can make such a pronouncement in real time with any degree of confidence. But it is clear enough in this case.

  1. Q: How long do you think the recession will last? How big would be the recession impact?

JF: The onset of the recession is very rapid, by historical standards.  The loss in output will probably be deep. However, it is not inevitable that the recession should last a long time.  If countries are able to fight the coronavirus with very aggressive public health measures — as some East Asian countries have done — so that the rate of infections peaks later this year, there could be a V-shaped recovery. read more

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