Economist can it get worse

We went back to those same experts to see how things played out, and what they're keeping their eye on in the future. At the time, they all said they thought the country would fare better than it did the last time it was faced with widespread economic uncertainty, during the economic recession.

But they also had some worries, about how much the government would intervene and how effective the country's vaccine programme would be. When the pandemic hit the US hard in the spring of , everything ground to a halt. The country hadn't seen a dip like that since the financial collapse.

And like during the financial crisis, the US government needed to act quickly to avoid further damage, says Todd Knoop, an economist who researches the history of recessions at Cornell College.

When the BBC spoke with Mr Knoop last June, he was hopeful government spending and monetary policy would keep the economy from totally collapsing. So what actually happened? Mr Knoop's prediction was right on the money. Congress passed a series of aid packages worth trillions of dollars. He believes these supports, which included direct payments to Americans and extended unemployment benefits, helped keep many people afloat even when they were out of work.

The GDP has rebounded, 6. While the unemployment rate is still higher than it was pre-pandemic, about 15 million Americans went back to work, which is also good news. Campbell Harvey, an economist at Duke University, agrees.

Last June, he likened the pandemic to a hurricane, which wipes out businesses and homes indiscriminately. Pandemic spending is akin to disaster relief, he argued. But even with government aid, many small businesses have gone under or are struggling, he says, and that will leave a mark on the economy as a whole.

During the first wave of lockdowns and stay-at-home orders last spring, Mr Knoop says it was clear that industries that relied on in-person customers - like travel and some retail - were going to struggle, while others would more easily adapt to the "new normal". What actually happened:. Mr Knoop was right - the pandemic decimated some industries and boosted others. Tech-heavy companies that delivered products or services to people's homes - like Amazon, Netflix, and Shopify —thrived.

Meanwhile, entire industries like hospitality and transportation saw widespread collapse, with millions still out of work. When the Dow Jones dropped nearly 3, points in a single day on 16 March , many panicked. But Mr Harvey predicted that as soon as viable vaccines emerged, the economy would rebound. The stock market has gone on to reach record highs since that record low on that March day, with the Dow Jones almost doubling in a year, reaching an all-time high of 34, While this boom is even bigger than Mr Harvey expected, he remains cautious about what this means for long-term economic recovery.

It's like oh, we're just back to exactly where we were. That is hard to buy," he says. NB: I think we will see global growth in the third, fourth quarters and into It will not be a robust growth rate and a lot of it will depend on a vaccine. Obviously, the sooner a vaccine is available and widely distributed, the better the chances of growth, but we don't really see that happening until the second half of One could say that manufacturing is probably enjoying a V-shaped recovery, at least temporarily, but services, which were among the hardest hits — especially airlines, travel and entertainment — these are in U-shaped recoveries.

People have talked about a W. You probably won't get a W unless there's a serious second wave, which I don't think is likely but it's possible. Could you tell us more about the sectors that have been hardest hit, and the ones that are thriving?

NB: Well, the hardest hit are clearly any activities or any industries that depend on large groups of people coming together in a spot, so airlines are a perfect example of this. Hotels are another example. And there are huge amounts of excess capacity on cruise ships. Anything to do with conferences has also been hard hit. In terms of the industries that have done well, high tech is of course an example.

Obviously, everybody's ordering from Amazon rather than going to stores but beyond that a lot of industries are looking to accelerate the digital revolution. Ironically, healthcare is also benefiting in some sense, because of the demand. Why would housing boom? It is in the US, maybe less so elsewhere. Basically, a lot of people are fleeing to suburbs.

I want more space between myself and my neighbours. COVID has hit even the richest countries in the world hard. What is it doing to developing economies? And are there lessons from the emerging world that could be applied to wealthier places? Taiwan and South Korea are notable for their testing and tracing. So that's a definite lesson. It's not only the virus itself but events outside of their countries that are then coming back to hurt them.

Looking at the big picture, are we going to see a different kind of economy and a green recovery emerge from the pandemic? I don't think it's going to be business as usual: I think there are going to be some big, big changes happening.

We may not see them overnight. It may take some time. But let's go through a few of them. I think this will accelerate the movement towards a green economy. This is a perfect opportunity for a lot of companies as they look at new, green technologies. I think that's going to be very positive. But we are going to see a substitution of capital for labour. Skill and labour-intensive industries are very worried about the vulnerability to viruses of all kinds, so you'll see greater emphasis on robotics, which creates its own challenges, of course.

We think that the process of urbanization will slow. I don't know if it will reverse, but it will definitely slow down. We've seen this so-called flight to suburbs occurring. Separately, in terms of the travel and tourism industry, one has to wonder what will come out the other end. Our best guess is that things like business travel will be curtailed quite dramatically.

I think healthcare is another area where we will see some massive transformations as we go forward. The views expressed in this article are those of the author alone and not the World Economic Forum. US consumer prices have risen to their highest rate since , with consumer prices up 6. Economists say the inflation could be long-lasting. World-renowned leadership expert, Michael Useem, has developed a checklist that includes 16 mission-critical principles to make good and timely decisions.

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