What’s your model for why 2.5-10% of the world dying causes a global recession? It’s plausible to me from the mortality demographics that the risk of death is much higher among older people, and the impact on the workforce will be small, on the order of 0.4% of the workforce for 2.5% of the population. So while it’s a bit morbid to think about, it is not obvious mortality causes a sustained economic downturn.
Widespread panic and quarantine also seems dangerous to the economy. But there was pretty strong panic in Hong Kong during SARS, and the result was a V-shaped recovery: a transient shock, followed by increased economic growth the following year. The current coronavirus will surely last longer and have more psychological weight due to the sheer number of deaths and global nature, but I don’t have a concrete picture of how that leads to a recession.
What’s your model for why 2.5-10% of the world dying causes a global recession? It’s plausible to me from the mortality demographics that the risk of death is much higher among older people, and the impact on the workforce will be small, on the order of 0.4% of the workforce for 2.5% of the population. So while it’s a bit morbid to think about, it is not obvious mortality causes a sustained economic downturn.
Widespread panic and quarantine also seems dangerous to the economy. But there was pretty strong panic in Hong Kong during SARS, and the result was a V-shaped recovery: a transient shock, followed by increased economic growth the following year. The current coronavirus will surely last longer and have more psychological weight due to the sheer number of deaths and global nature, but I don’t have a concrete picture of how that leads to a recession.