The scarring effects of past crises on the global economy

Natalia Martín Fuentes and Isabella Moder

Economic Bulletin Boxes, 2021, vol. 8

Abstract: This box aims to assess the long-term implications of past crises for the global economy’s potential output and to discuss potential scarring effects of the coronavirus (COVID-19) pandemic. Starting with a review of past crises and the transmission channels through which potential output is affected, it concludes that the pandemic could leave scarring effects on the global economy, with labour supply likely to be initially hit the most. However, effects on the capital stock are potentially more relevant over the medium to long term. JEL Classification: C23, E22, E23, E24, E32, O11, O40

Keywords: COVID-19; Potential output; production function (search for similar items in EconPapers)
Date: 2021-01
Note: 2769592
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbbox:2021:0008:1

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