According to the survey results, the U.S. and European economists are predicting a recession as a result of the new coronavirus, COVID-19.
According to the recent University of Chicago survey, most US and European economists predicted a recession because of COVID-19.
The Initiative on Global Markets at the University of Chicago’s Booth School of Business published the results by 74 economists on the likelihood of a major recession. Accordingly, 62 percent of U.S experts and 82 percent of European experts based ones agreed that there is likely to be a recession.
“A sharp slowdown is likely; whether it will be persistent enough to rise to the level of a recession is not clear yet,” Anil Kashyap of Chicago Booth commented. Meanwhile, according to Jean-Pierre Danthine of the Paris School of Economics, it is inevitable that at least two quarters would register negative growth. Still, subsequent developments will depend heavily on political reactions to the crisis of countries.
For most economists agree that the COVID-19 epidemic could lead to a major recession, many people emphasized that the impact of the measures taken to contain the outbreak has already disrupted economic activities. “The contagion rate worries more than the mortality rate itself as it shuts down the whole economy to contain effects on the health system,” Elena Carletti of Bocconi University said.
Global stock markets have suffered steep losses during the past two weeks. Wall Street triggered four circuit breakers to halt panic selling due to concerns about the impact of the epidemic. Meanwhile, European stocks continued to plunge with little losses recovered, and major world currencies depreciated severely against the U.S. dollar as investors flew to stockpile safe-haven assets.
While China is starting to resume production and business activities when the country has passed the epidemic, most businesses in other countries around the world are now implementing home-working policies against the rapid spread of COVID-19 in many countries such as Italy, Spain, and the USA.