Fighting the scarring effects of COVID-19

Stagnation traps

Valerie Cerra, Antonio Fatas and Sweta Saxena

Industrial and Corporate Change, 2021, vol. 30, issue 2, 459-466

Abstract: The large fall in global output and massive job losses during the current pandemic is creating a socio-economic upheaval that is likely to persist over time. From previous crises, we know that some of their effects are likely to leave permanent scars through what is known as hysteresis. This article discusses how the concept of scarring or hysteresis is relevant for the current pandemic-induced economic crisis. We discuss channels through which these effects can become persistent and how fiscal and monetary policies can minimize their consequences and work to create a global economy that is more resilient, more equal and greener.t

JEL-codes: E32 E60 O47 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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