Economists said the impact of COVID-19 is more akin to a natural disaster like a hurricane, rather than a traditional financial or economic crisis.
The coronavirus pandemic has hit like a worldwide hurricane, shutting activity in most economies simultaneously, but some forecasters are more optimistic about the prospects for recovery once the worst has past.
With 1.5 million confirmed cases and 100,000 deaths, the virus has forced economies worldwide to shut down, which in the United States caused 17 million workers to lose their jobs in just three weeks. But Dynan, who helped produce the semi-annual forecast put out by the Peterson Institute for International Economics, is more upbeat about the recovery, projecting a 7.2 percent US rebound in 2021 year-over-year.
"We're going to have to proceed slowly, in terms of opening up the economy again. And we're going to have some setbacks," she said, while acknowledging that many of her Peterson colleagues disagree with her more upbeat view. Even with massive government spending in place,"the employment losses will be traumatic, and the rebound post-virus will be U-shaped with a full recovery taking 12 to 18 months," he said.With the massive infusions of cash to support large companies and small businesses, the US government's finances will take a hit.
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