With the coronavirus pandemic slamming the economy into a severe recession, it’s natural to try to see the light at the end of the tunnel – and imagine the shape of the recovery. Yet, that revival will depend critically on the nature and intensity of this recession.
A recession’s severity is measured by its depth, diffusion and duration, or what we call the 3Ds. In terms of depth, this recession looks extreme, and will likely be the deepest in living memory. It’s also exceptionally widespread in terms of industries affected, so in terms of diffusion, as well, it’s a severe recession.
Regarding duration, though, this recession still could end up on the short side. In fact, there’s reason to believe it’ll be much shorter than the 2007-09 Great Recession, which dragged on for 18 months.
Here’s why we believe that this recession […]