Pandemics have effects that last for decades. Following a pandemic, the natural rate of interest declines for years thereafter, reaching its nadir about 20 years later.
, entitled “Longer-Run Economic Consequences of Pandemics,” ask: “What are the medium- to long-term effects of pandemics? How do they differ from other economic disasters?”“Significant macroeconomic after-effects of pandemics persist for decades, with real rates of return substantially depressed, in stark contrast to what happens after wars… capital is destroyed in wars, but not in pandemics; pandemics instead may induce relative labour scarcity and/or a shift to greater precautionary savings,”...
“Pandemics, like natural disasters, offer a unique opportunity to study how economies work. They are like a randomised control trial, but at a much larger scale, with microbiology providing the natural assignment mechanism,” the study says. “This shock left England with a 25% to 40% drop in labour supply, a roughly 100% increase in real wages, and a decline in rates of return on land from about 8% to 5%.”“Pandemics have effects that last for decades. Following a pandemic, the natural rate of interest declines for years thereafter, reaching its nadir about 20 years later, with the natural rate about 150 bps lower had the pandemic not taken place.
“While the short-run fallout from pandemics looks similar to other economic disasters – large and sudden declines in economic activity – the medium- to long-run economic consequences are staggeringly different. And these differences matter for policymakers. In any such abrupt downturn, the textbook response is to either borrow to smooth the shock, or to pursue an aggressive stimulative fiscal policy to counter the shock. Both will likely result in a rapid buildup of public debt.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Why managing blood pressure matters during COVID-19 pandemic[ANALYSIS] Why managing blood pressure matters during COVID-19 pandemic
Read more »
Covid-19 pandemic threatens gains made in fight against HIVAbout 42,500 more lives than usual will be lost to HIV/Aids in the next year if half people in SA on treatment are unable to get their medication
Read more »
Another win for government as FF+ challenge to Disaster Act is dismissedThe FF+ stated that under a state of emergency, the constitution builds in safeguards to the exercise of executive power precisely because of the severe restriction on fundamental rights inherent in a state of emergency.
Read more »
OPINION | 100 days of lockdown: The flaws are starting to show | News24The Covid-19 pandemic has not only revealed flaws in the way the ANC governs, but has also shown the DA and EFF's true colours, argues Ivor Sarakinsky.
Read more »
The mask or gloves that save your life could end up killing the oceansGains in the battle against single-use plastics are being undone as the Covid-19 pandemic rages on, writes Sanet Oberholzer
Read more »
DESNÉ MASIE: The transatlantic myth of the ‘liberal’ maskWearing or not wearing a face mask during the Covid-19 pandemic in the UK and US marks your political and cultural leanings
Read more »