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Will the Recovery Last?

Although some recent high-frequency indicators have cast a shadow on what previously appeared to be a robust, rapid recovery from the pandemic-induced recession, there is still ample cause for optimism. But much will depend on how well policymakers in the major economies manage the foreseeable risks.

LONDON – Since last spring, it has been clear to me that a quick and sizeable recovery would follow from the pandemic-induced recession, owing to Western governments’ massive fiscal- and monetary-policy responses and the high probability that effective vaccines would be forthcoming. And as the scientific evidence in favor of the new emergency-approved vaccines continued to pile up (especially early this year), so, too, did the likelihood of a strong recovery.