COVID-19 has triggered the deepest global recession in decades. While the ultimate outcome is still uncertain, the pandemic is expected to plunge most countries into recession in 2020, with per capita income contracting in the largest fraction of countries globally since 1870. The immediate policy priorities are to alleviate the human costs and attenuate the near-term economic losses. Once the crisis abates, it will be necessary to reaffirm a credible commitment to sustainable policies and undertake the reforms necessary to buttress long-term prospects. Global coordination and cooperation provide the greatest chance of achieving public health goals and enabling a robust recovery.
On Thursday, the Centre for Finance and Development (CFD), the World Bank and the Centre for Economic Policy Research (CEPR) hosted an online discussion on the World Bank’s latest Global Economic Prospects Report of June 2020.
Ayhan Kose and Franziska Ohnsorge from the World Bank discussed with the CFD’s professors Ugo Panizza and Nathan Sussman.
In his presentation, Professor Nathan Sussman asked “Is this time different?”, comparing the current situation with an exogenous lockdown of the economy with an endogenous shock to the economy. He also pointed out how the financial markets of emerging markets have stabilized fairly quickly.
Professor Sussman told the numerous attendees that the unprecedented fiscal support in the current post-pandemic context can be used to provide growth enhancing opportunities, for example by moving forward investments in renewable energies and sustainability or by investing in remote learning and tele-working infrastructure. Pointing to a potential Green New Deal, Professor Sussman explained that such investments in green technologies would especially benefit low income countries.
Nathan Sussman’s presentation (PDF, 526 KB)
World Bank Global Economic Prospects Report June 2020
Video recording of the online discussion