by That’s the headline for my recent piece in Inside Story, responding to statements from the IMF that “the world is about to experience the worst recession since the Great Depression”. My complaint isn’t so much about the numerical estimates made by the IMF (which are actually optimistic) but about the framing in terms of the Great Depression. It’s almost certain that we will see a larger decline in global income and output in 2020 than we did in the GFC year of 2008. However, if things are managed well, we should see a substantial recovery in 2021, unlike the years of austerity that followed the GFC in many countries. The comparison is also distorted by the fact that growth rates in China and India have been slowing for some time for reasons independent of the pandemic. Share
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That’s the headline for my recent piece in Inside Story, responding to statements from the IMF that “the world is about to experience the worst recession since the Great Depression”. My complaint isn’t so much about the numerical estimates made by the IMF (which are actually optimistic) but about the framing in terms of the Great Depression. It’s almost certain that we will see a larger decline in global income and output in 2020 than we did in the GFC year of 2008. However, if things are managed well, we should see a substantial recovery in 2021, unlike the years of austerity that followed the GFC in many countries. The comparison is also distorted by the fact that growth rates in China and India have been slowing for some time for reasons independent of the pandemic.