Real-World Economics Review

from Dean Baker There have been a number of pieces in major news outlets telling us what the recovery will look like from this recession. Most have been pretty negative. The important thing to know about these forecasts is that the people making these forecasts don’t have a clue what they are talking about. The shape of recovery will depend first and foremost on the extent to which the coronavirus is contained or is treatable, areas in which most of our prognosticators have zero...

from David Ruccio In the United States and around the world, governments are responding to the twin pandemics—of novel coronavirus and escalating unemployment—with massive bailouts. Not unlike what happened more than a decade ago, after the global crash of 2007-08. But there seems to be something different this time around—not only because of the speed of both the viral contamination and the economic meltdown, but also as a reaction to the terms of the bailout that was enacted in the...

from Lars Syll What will be the lasting effects of the covid-19 pandemic? Start with the size of the state. Over the next year government debt will rise sharply, as spending jumps and tax revenues collapse. When the economy recovers, attention will turn to paying it down. “Capital and Ideology”, a new book by Thomas Piketty, shows that after the first and second world wars many governments in the West turned to heavier taxation of the incomes and wealth of the richest to achieve that goal...

from Peter Radford We all thought that this morning’s announcement of the new claims for jobless insurance would be shocking.  The usual scuttle in the financial markets had been that we might see numbers well over 2,000,000, but the actual number soared even beyond that.  At 3,283,000 it is difficult to articulate what this means.  To put it in some sort of perspective, the previous week had seen 282,000 new claims, and the previous all-time record high of 695,000 had been set back in...

from an article by Nassim Nicholas Taleb and Yaneer Bar-Yam in yesterday’s Guardian Dominic Cummings [Chief Adviser to UK Prime Minister Boris Johnson] loves to theorise about complexity, but he’s getting it all wrong. . . . The error in the UK is on two levels. Modelling and policymaking. First, at the modelling level, the government relied at all stages on epidemiological models that were designed to show us roughly what happens when a preselected set of actions are made, and not what...

from David Ruccio The Labor Department on Thursday reported the number of American workers filing new claims for jobless benefits last week rose to 3.28 million from 282,000 a week earlier. Nothing in the 53-year history of the series comes close. In the worst week of 2009, when the job market was reeling, initial claims hit 665,000. Worse, the millions in new claims don’t reflect all the people who were pushed out of jobs last week as the novel coronavirus crisis emptied out Main...

Source: https://www.statista.com/statistics/1104709/coronavirus-deaths-worldwide-per-million-inhabitants/