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Economics

对新型冠状病毒衰退的解读

Apr 7, 2020 Kenneth Rogoff

发自剑桥—随着时间一天天过去，2008年全球金融危机渐渐看似只不过是当前经济大灾难的一场预演而已。而眼下正在爆发的短期全球产出崩溃似乎完全可以比肩甚至超过以往150年间发生的任何一场衰退。

即使中央银行和财政当局竭尽全力缓解冲击，发达经济体的资产市场依然陷入了瘫痪，资本则以惊人的速度逃离新兴市场。严重的经济衰退和金融危机已经无可避免，剩下的关键问题则是衰退的严重程度和持续时间。

在我们能够快速彻底地应对这场公共卫生挑战之前，经济学家几乎不可能去预测这场危机将如何收尾。而民众和政策制定者们在未来几周/几月内的行为方式所涉及的社会经济不确定性至少会跟新型冠状病毒在科学上的不确定性一样大。

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Kenneth Rogoff

Writing for PS since 2002
243 Commentaries

Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. He is co-author of This Time is Different: Eight Centuries of Financial Folly (Princeton University Press, 2011) and author of The Curse of Cash (Princeton University Press, 2016).

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0 Comments on this paragraph, 30 Comments on this article

Subhendu Das May 13, 2020

“The short-term collapse in global output now underway already seems likely to rival or exceed that of any recession in the last 150 years.” - It is time to realize that this economic system and money cannot be sustained.

Periodic recessions, created artificially or naturally, using something like Covid-19, will always happen. This shows that we need to remove false money and create moneyless economy (MLE). Money is false, because money is not an object of nature. Therefore money must be free and abundant at its source, which is the central bank (CB). Using something false you cannot create anything true.

In 2008 recessions Bloomberg court case against CB revealed that CB injected more than 10T dollars to prop up the banks. If we do not switch to MLE then we should inject as much money as we want, openly and freely, to maintain the economy. To learn more about MLE take a look at https://www.academia.edu/38590496/A_COMPARISON_OF_MODERN_SCIENCE_WITH_VEDIC_SCIENCE
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Jean-Pierre Dumas May 3, 2020

"The most advanced health system" which is not able to provide masks and tests to the medical staff and to the population?
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srinivasan gopalan Apr 14, 2020

Kudos to the learned professor for being hard-nosed and magisterial in his just assessment of the ground realities. When the entire universe stays stagnant sans any productive activity for more than a month in the major economies of the rich world and the densely populated emerging economies, what else will pan out than the recession of the economies and the rampant depression of the people. The post-war prosperity might have laid at rest the Malthusian paranoia of human miseries ever getting aggravated by natural checks in the face of rising human numbers. But the resultant lop-sided development in technology we all glorified had not lessened our fear over abrupt check from biological monsters of the microscopic invader like the corona virus that has in one fell swoop demonstrated that we are the play things for the colossal cosmic forces and that we should not punch above our puny puissance whatever resilience we may boast of as the marvel of creation! G.Srnivasan, Journalist, New Delhi, India.
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David Freeman Apr 13, 2020

Although the U.S. claims to have the world's most advanced health system, it is only available to those who can afford it. The health systems in the other Western democracies are as advanced as the one in the U.S., but those systems are accessible to the entire population. Having a resource that only the privileged can use is little help.
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Mark Fichman Apr 12, 2020

I don’t think the President will allow us to have aggressive testing. The reasons are obvious.
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ronald.trautman1 Apr 12, 2020

First for some context, the Black Plague (1347-1351) killed 200m people and up to 60% of the population in Europe and Asia. The last global pandemic, the Spanish Influenza (1918-1919), killed 50m people and infected 1/3 of the world’s population. It’s worth noting that the US quickly transitioned from this devastating pandemic into the roaring 20’s and there wasn’t a permanent affect on how we lived despite something that was exponentially much greater than the Coronavirus.

Fast forward to 2018 for the following data on annual deaths form the CDC: suicides 50k, drug overdose 70k, alcohol 88k and cancer 606k. The flu in the US infects ~60m people a year and deaths average 40k - 60k. This despite 50% of the population getting a flu shot and up to five drugs that will provide a cure.

The article states the dismal job done by the government. That surely is a blanket statement by the author which requires one to drill down. NY has done a dismal job and that is undeniable. They were way too late in shutting the state down (March 11). Yet, Cuomo is praised for his handling of the situation. NY represents 5.9% of the population yet they have 33.9% of the cases. Even more startlingly, they have more cases than any country in the world. NY and NJ have 45% of all the cases yet they are only 8.6% of the population. There are too many states to mention who have done a terrific job in getting out in front of this early. California, Ohio and Missouri to name just a few.

As tragic as the deaths are related to this virus, the real danger is economic. By forcing a global economic shutdown, we risk a severe recession and possible depression. The unemployment rate will surely surpass the Great Depression by next week.

Social distancing has undoubtedly worked. However, the real issue is what do you do after the curve has flattened and then recedes? Reintroducing the virus will be inevitable when we slowly stage in phases of getting back to everyday life. We should expect that and not overact because it is unavoidable. Large events - concerts, sporting events, etc. almost seem certain to be put off indefinitely.

Things will not get back to “normal” until a vaccine is introduced. Presently, there are 53 companies working on one. Still, that is at least a year away. A more immediate fix is a drug to provide a cure. Once that happens, likely by late summer, we will have a semblance of normalcy but certain sectors will be forever changed.

Science will undoubtedly win in the end but until that happens, there is a balance between the economy and avoiding a depression and containing the virus.
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Jarmo Eskelinen Apr 12, 2020

A very interesting, though slightly depressing read. One detail though: on exactly which grounds does the US have “the world’s most advanced health system”? Looking at it from Europe, not on the basis of cost, availability or results (just look at the Childbirth mortality rates, as one shocking example -https://www.health.harvard.edu/blog/a-soaring-maternal-mortality-rate-what-does-it-mean-for-you-2018101614914). And, obviously, not in crisis management either. So where’s that “advanced” manifested, then?
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Rik Rijs Apr 10, 2020

Dear Mr. Rogoff, why not make some estimates? International tourism won't be back before summer 2021. Tourism as % of GDP: Italy 14%, Spain 14, south-East Asia, .... internal tourism will reduce dramatically. Airtrafic, idem. Boeing, Airbus, Bombardier, ... Automotive industry, ... Real estate, banking, ...It must be possible to make estimates of GDP collapses for 2020. My gues? South East Asia 10-15 .% Italy, Spain, Greece, ... say over 20%?? France 12-15%?? Germany 8-13% . 2021 will see an improvement but to what degree? Even with a vaccine. It took decades to overcome tbc and polio. And let us not imagine that the virus mutates every year or so.
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John Alexander Apr 9, 2020

"A deep economic slump and financial crisis are unavoidable."

Yes, undoubtedly, and I'm one of those who take Rogoff seriously. What I regret is his unapologetic use of the term "economic slump". An economic slump is a slump in "the economy". But what is "the economy"? I look around me in maturity and what I see is this: "the economy", or the economic culture we have known all our lives, is a complex phenomenon of which the salient salient features are (1) competitiveness, relentlessly drilled into the citizen from childhood onward, (2) artificial demand, i.e. the ubiquitous, intense, unceasing, frenetic, and openly cynical encouragement to buy what deep down you don't really need or want, and (3) a heavily regressive tax regime by means of which wealth is conveyed upward in torrents to a small, complacent, highly established elite. What really needs to be done is not to revitalize "the economy" but to question, with the utmost seriousness, the legitimacy of (1), (2), and (3).
- Jamal Siyaj Apr 10, 2020
  
  Excellent commentary; the only remedy I see is for socity to reimagine and reinvent the real economy
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Waleed Addas Apr 9, 2020

I am really shocked but again it is no surprise!!

Thousands and thousands of people are dying and millions have been infected and still all your thoughts and analysis are confined to consumption and economic growth models and toys!

Does not any one get it?

The world will (and should) never be the same again.

It’s not the economy, stupid! It’s now and FOREVER the society, stupid!!
Let’s do away with a world fascinated by ECONOMICS and embrace a new world governed by ETHICS 🤍—that’s the only way out! SORTIE
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Robert REYNOLDS Apr 9, 2020

Ken I was taking your article quite seriously until you suggested that America has the world's most advanced health system. I nearly choked when I read that. America is becoming a basket case when it comes to health care.
- Mark Fichman Apr 12, 2020
  
  I had the same reaction to the statement that we have the world’s most advanced health care system. We clearly don’t and have not had the best system for a long time.
  
  We collectively have to stop mouthing cliches about our country and face its reality, whether about healthcare or our wonderful American values.
  
  I am glad you didn’t choke. I am sure you would have had trouble getting any good health care.
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- Rik Rijs Apr 10, 2020
  
  Indeed, I too was surprised to read "Now that the US has failed miserably to contain the outbreak despite having the world’s most advanced health system, ...". When the system doesn't reach a high percentage of the population it already fails.
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Helen Clemens Apr 9, 2020

No mention of anti-virals that could, if effective, shorten the duration and severity of the virus. Several are undergoing tests or trials (because they are already approved for other human treatments). No mention of the advantage of linking the outcome of this meteor strike with the inescapable environmental-climatic whopper already sending out its early ripples. Thus no constructive argument for necessary investment in unavoidable change. Don't really see the point of the article in terms of this century's threats and opportunities.
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14abril1959 Apr 8, 2020

Posiblemente Estados Unidos tiene el sistema sanitario más avanzado del mundo, pero una parte muy importante de su población no tiene acceso al mismo.
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Brice Couturier Apr 8, 2020

Il y a une grave erreur de traduction en français. Rogoff écrit que "la crise financière a favorisé l'émergence de dirigeants populistes et anti-technocratiques". La traduction donne "l'émergence de dirigeants populistes et technocrates.... " C'est juste le contraire. Problème.
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Renato Fonte Apr 8, 2020

Now that the US has failed miserably to contain the outbreak despite having the world’s most advanced health system.......is this a joke????
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Laurie McGinness Apr 7, 2020

The statement that America has the most advanced health care system in the world shows a distressingly narrow view. America may, though probably not anymore, have the best medical technology. It may have the greatest concentration of health expertise. Unfortunately it has an appallingly inefficient and unjust system of deploying these resources. By denying adequate health care to those unable to afford it and by social policies forcing large numbers of its population into poverty and homelessness, America has brought this evil upon itself. The most advanced health care system in the world? It would be a good joke if there was anything remotely amusing about the current catastrophe.
- John Sontrop Apr 8, 2020
  
  Totally agree. This COVID-19 pandemic has shown that you may have the latest and greatest in health care technology and expertise, but if it is not available and shared with all your own population, it is wasted. This pandemic shows that the US will need to rethink it's private health care system.
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Robert Wolff Apr 7, 2020

Lots of good observations here by Rogoff. I am particularly impressed by his observation that we still don't know what the final economic impact of COVID-19 will be, and that the Markets are responding as if this is the economic bottom (already discounted) largely because of the dramatic recovery from the 2008-2009 'Great Recession'.

The Fed and Government accumulated "lessons learned" regarding how they SHOULD have dealt with the "Great Recession" financial crisis and are applying those lessons to deal 'better' (this time) with the current economic downturn due to COVID-19.

Consequently, if the "lessons learned" from the "Great Recession" do NOT apply to the current downturn due to COVID-19 then the wrong actions by the Fed and Government will again be deleterious to any recovery, and not in retrospect (from the future of now) support it.

There are probably going to be more "lessons learned" from the mishandling of the COVID-19 epidemic than there were from the mishandling of the financial crisis that led to the "Great Recession".

Even, So, Come Lord Jesus!
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vimmi banu Apr 7, 2020

The article reflects something between Optimism and Pessimism, Realism. As an Economist, there is always a word of caution of what they visualize and interpret in understandable vernacular. As the world is under the grip of Covid-19, we are really fighting an enemy with limited resources. Set aside the political presence in every border, but the socio-economic devastation caused is non quantifiable. Even a non-descriptive place, is facing its own repercussions. The financial crisis of 2008 impact, though Trans-Continental there was pace and allowance for growth. Albeit, Incentives in the form of stimulus package in circulation even if we are factoring there is no fixed time frame to initiate growth engine.
One more question – what are the lessons learnt to prevent this problem in the future. The present world apart from other problems like global warming mirrors a faceless enemy to the pharmaceutical and medical faculties (in form of preventive medicine). Hope is what makes every challenge an opportunity to proceed.
- Robert Wolff Apr 7, 2020
  
  Within this advent, we can all likely rationally admit that we will not "Do Better" than our Fathers. It is inevitable that "We will do Worse".
  
  The above is the expectation of our Leaders, worldwide, and all their caveats indicate the same: "We must expect less than our Fathers expected, especially as regards upward mobility."
  
  Both the High and Mighty, those Aspiring to their Heights, and the Lowly who seek ascension must, altogether, lower their sights.
  
  Not different than the Human Species, 100,000 years ago, on the verge of extinction, learned 'Technology' to survive through extreme circumstances that disfavored their survival.
  
  We must "morph" again, from what we are, to what we will be. That is our only salvation.
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Paul Daley Apr 7, 2020

Good article. But Rogoff's predictions may be too pessimistic. As time goes on and society becomes more familiar with the peculiarities of the covid epidemic, the mix of individual and collective actions will inevitably shift towards a more endurable and efficient mix. Right now, instinct encourages us to throw up every defense imaginable against an unfamiliar enemy, but as these measures are themselves tested, they'll be adjusted. Lockdowns that may be critical in dense urban settings may not be essential in rural areas. Hospital capacity and medical treatments will adjust; and quarantines may eventually be restricted only to the most vulnerable who can not truly benefit from any other medical treatment.

The point is that this crisis, like every other crisis that deserves the name, is different. It will likely need new treatments and novel approaches. But western, democratic societies specialize in novel approaches. It's what they do. Given time and information, they'll find better ways forward.
- michael schmitt Apr 7, 2020
  
  it would be nice if Rogoff would share some simple models in order to draw some boundaries around possible outcomes. for instance, what does GDP look like if the current shutdowns in the US last for another 3 weeks? 3 months?
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对新型冠状病毒衰退的解读

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