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New thinking on corporate risk and resilience in the global economy.

The Pandemic Will Structurally Change the Global Economy More Than We Think

Those who say there are no letters left in the alphabet to describe the evolution of the world economy after the pandemic are absolutely right. It is abundantly clear now that we cannot expect to see a rapid V-shaped recovery — nor should we expect a complete stagnation or a L-shaped recovery.

The Square Root-Shaped Economy



However, this rapid recovery is immediately followed by a structural slowdown. In other words, the problem is not so much a sudden collapse in activity, but the negative impact that follows.


4 Reasons Why COVID Brings Lower Growth

Firstly, companies will be less profitable and will react by cutting fixed asset investment.




是时候重新思考许多的基本原则of our economic model to mitigate these impacts caused by the COVID-19 pandemic.



The combination of ultra-abundant global liquidity and fluctuations in risk aversion can lead to highly unstable capital flows, which remain crucial for many emerging countries. And the more an emerging country depends on external financing, the more costly this situation can be in terms of volatility of capital flows and economic performance.

Another form of financial instability may come from the growing doubt surrounding the role of the dollar in the world economy, stemming from the lack of U.S. leadership, the sharp increase in U.S. external debt and the ultra-expansionary monetary policy of the Federal Reserve.


The Hiatus in Education

The fifth and final reason is driven by the loss of human capital due to the discontinuation of education programs globally. There is bound to be a reduction in fertility rates for many years, given the negative impact of the pandemic on household income for years to come.





是时候重新思考许多的基本原则of our economic model to mitigate these impacts.



AliciaGarcíaHerrero是亚太地区的首席经济学家Natixis和一位高级研究员布鲁格尔。Previously she was chief economist for Emerging Markets at Banco Bilbao Vizcaya Argentaria. She is a non-resident fellow at Cornell’s emerging market research centre and Senior Research Fellow at El Cano Royal Institute for International Relations. She is currently adjunct professor at City University of Hong Kong, visiting faculty at University of Science and Technology as well as at China-Europe International Business School.

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