Topic: Possible Patterns of Recovery - page 3. (Read 652 times)

I agree. For such a synchronized V-shaped recovery to take place, nations would need to reopen their economy simultaneously (or within close time frames), inorder to reconnect the supply chain. The United States and China are trade partners and are the highest importers of products from each other. So, if China opens up (as is happening) while the U.S remains closed, there would be slow growth rate as they are working without a major market for their product and would also lack imports.

This could be a representation of the K-shaped recovery curve; where one sector rebounds due to stimulus or government grants, while another is neglected and continues to slide down or remains stagnant.

Keeping to health guidelines would reduce the impact of a second or third wave. Fear index of the pandemic has reduced over the months and people now defy lockdown laws (at least in my area), this increases the possibility of another wave.

I just hope it doesn't hit that bad again! This time the economy might sink to the lowest. Inflation is not a problem anymore. I mean the governments all around the world printed shit load already lol. Let's hope for the best!

The economy took a big hit this year, where almost all countries in the world having negative GDP growth rates. But the stimulus packages came very fast all around the world we saw governments injecting billions of USD into their economies. So while the real economy is trailing, the stock market is doing fine. Dow Jones for example is still positive over 1 year, Euro Stoxx is only slightly down.

I think the recovery in the real economy is depending on the future lock downs, if there is a second one coming or not. As for the stock market I don't see such a big risk because the government will just keep throwing more money into the fire.

The Covid-19 pandemic has not only brought damage to the national economy and social life but has also caused extreme pressure on the international community, the health care system, and the global economy. Like a race, the sooner a country finishes the race and stem the pandemic, the sooner a country can enter a pit stop, the faster it can prepare a post-pandemic strategy. The sooner you enter the pitstop, the less economic damage will be incurred, which means less costs and leverage are needed to boost the economy.

The existence of a total lockdown that should have been carried out at the beginning of the pandemic was indeed costly but the pandemic did not drag on like what happened in China. So national stability can be maintained and people's purchasing power can be restored quickly and the paralysis of the production sector does not reach above 50%. Imagine if all countries take the same policy, the global supply chain will soon be connected again and the destruction of the global economy can be avoided. So the V-shaped form of economic recovery can be obtained.

So would countries who were more proactive in handling the situation experience a quicker rebound (like a V or U shaped curve) or would they be slowed down by lockdown in other areas as economics are more synchronized today?
New Zealand were one of the nation who handled the pandemic well and its finance minister expects strong economic rebound from technical recession

Agree. I edited the OP a bit, I believe it originally contained too much information which were not relevant to the topic being discussed.

The possible form of recovery graph is L-shape because the economic impact of the pandemic is largely determined by the effectiveness of handling the spread and transmission of Covid-19 itself, in this case the health capacity will determine the success of the pandemic containment. The fact is that pandemic management will be more effective if large-scale lockdowns or social restrictions are imposed, but the effects of reimposing harsh virus restrictions can hinder recovery and even trigger financial turmoil. In addition, the government has not been maximal in protecting people affected by the pandemic on the grounds of a budget deficit, even though social assistance and protection are the second priority that must run effectively to continue to support people's purchasing power, with the aim that the economy does not suffer too much.

Due to pessimism about vaccines and fear of recession and depression, many countries whose economies are not opened at the right time, are too hasty and aggressive. Economic activities should be opened after various health indicators show that the spread of this virus has been effectively controlled. This policy made the handling of the pandemic prolonged which meant that the economy was getting worse and it was very difficult to pump up again. The declining inflation rate in several developing and poor countries is evidence of weakening people's purchasing power. Economic growth that falls drastically and lasts a long time so that the economy does not recover for a significant period of time.

We are about nine months into the coronavirus outbreak and six months in from when it was declared a pandemic by the World Health Organization. At this point the economic effect of the virus has spread all over with top global economies like; United States, United kingdom, Canada, France, Germany, Italy, and Japan in recession, experiencing sharp economic contractions in the last quarter ranging from 20.4% (U.K) to 7.8% (Japan). Developing economies in Asia and Africa have also been hit hard.

Economic recovery is the next phase after a recession, it can range for a period of months to several years, ideally followed by economic expansion, in some cases, a country can slip back into recession.
While the drop in economies may have been global, the rate of recovery would certainly be different for various countries depending on their preemptive response to the situation.
Some economies are yet to begin the recovery process with nations setting stricter lockdown rules due to second waves, but with advancement in medicine, measures to counter a second wave would likely be more productive. If more people would keep to guidelines.

Recovery is represented using a variety of alphabets;

Source

• U-shaped curve: this is the most realistic recovery pattern most countries would take. According to a poll conducted by reuters;
In this pattern, the economy would suffer a sharp decline in key indicators, followed by a period of stagnation which would lead up to an expansion. This is similar to what I have noticed in China, after the drop in the first quarter, they are leading the recovery and have started to slowly return to normal, although actually economic metrics are difficult to identify.

• V-shaped curve; this is the second highest pattern from the polll above and is a very optimistic prediction, as it expects the economy to immediately rebound after a drop without any period of stagnation. I think this may be possible depending on the policies (fiscal and health) which were implemented during the decline. Flattening of the pandemic curve, would lead to reopening of businesses and increase in employment, this would stimulate the economy by creating an enabling environment. In an ideal economy, I think this might be possible, however some financial policies such as; massive money printing or zero or negative interest rate could have a recurring effect on the economy, resulting in a possible W-shaped curve. A second or third wave of the virus can also lead to economic crashes.

• W-shaped curve: this is represented by a sharp rebound followed by similar sharp drop in the recovery curve. The first spike upwards could be said to be a false indicator resulting from cut-and-cover policies meant to stimulate the economy without having any lasting effect. This is followed by an organic growth pattern, or could be repeated over again, if effective measures are not used.

• L-shaped curve: In this case, there is a long period of stagnation following the decline. This would lead to a long period of recovery before an economy enters into an expansion phase.

There's also a K-shaped curve: this is the most dynamic recovery curve which is characterised by varying patterns in various economic sectors and could be a result of discriminatory policies. A k-shaped recovery would split the recovery curve into two, one sector slips into stagnation or continues to decline, while the other begins the recovery process or rebounds back up.

What pattern of recovery are you expecting in your country?