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Mar 3 · Last update 3 mo. ago.

Will the Coronavirus cause a global recession?

The on-going coronavirus outbreak, which originated in Wuhan, China, has been declared a public health emergency of international concern. The outbreak is causing a major strain on international markets, with market leaders in numerous sectors reporting significant losses, and the Dow Jones Industrial Average experiencing its biggest single-day drop in history. With many economies internationally still reeling from the Great Recession a decade ago there are very real fears that the coronaviruss outbreak could lead to another major global recession. Is the 2019 coronavirus outbreak likely to cause a global recession? nypost.com/2020/01/27/coronavirus-origin-traced-to-animal-market-in-wuhan-tests-confirm money.usnews.com/investing/stock-market-news/articles/2020-02-12/coronavirus-stocks-companies-most-affected-by-the-outbreak usnews.com/news/economy/articles/2020-02-27/dow-plunges-to-biggest-loss-in-history-on-coronavirus-fears foxnews.com/us/decade-since-recession-thriving-cities-leave-others-behind
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Yes, and worse housing crisis than 2008
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Yes
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No
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Yes, and worse a healthcare catastrophe
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No, they are doing to same thing as 2008 and it will work for now…
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The economic relationship with the environment
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Yes, and worse housing crisis than 2008

Before the coronavirus pandemic had even began over two million American’s a year were facing foreclosure in what experts were already calling a eviction crisis. With a much larger and longer global recession looming experts are considering the even greater risk of a monumental housing crisis as the pandemic recession deepens. According to Diane Yentel, CEO of the National Low Income Housing Coalition, this crisis needs wide ranging government support, and if they fail to address this housing crisis there will be a devastating “tsunami of evictions and a spike in homelessness” [1].

This looming housing catastrophe looks set to hit renters especially hard, and a high percentage of renters are looking at eviction if nothing changes, and although Congress have passed an eviction ban in March 2020 landlords in multiple states are still issuing evictions. This increases the likelihood of worsening the health crisis, prolonging the pandemic and deepening the long-term economic impact, as well as the other knock on health crises from increase homelessness, trauma, and mental health issues – housing instability has huge health consequences. In a global health crisis like this housing should be viewed as an extension of healthcare, if you cannot socially isolate and stay home you will be much more at risk of continuing the pandemic, ensuring housing stability should be seen as the biggest public health necessity.

[1] cnbc.com/2020/06/10/how-to-prevent-the-coming-coronavirus-tsunami-of-evictions.html berkshireeagle.com/stories/local-housing-experts-gird-for-tsunami-of-foreclosures,601681 which.co.uk/news/2020/04/coronavirus-and-renting-what-does-it-mean-for-my-rights-as-a-tenant youtube.com/watch?v=H6O6srJxoiE msn.com/en-us/news/us/despite-federal-ban-landlords-are-still-moving-to-evict-people-during-the-pandemic/ar-BB12HZ52

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D H
Jul 7
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[1] https://www.cnbc.com/2020/06/10/how-to-prevent-the-coming-coronavirus-tsunami-of-evictions.html https://www.berkshireeagle.com/stories/local-housing-experts-gird-for-tsunami-of-foreclosures,601681 https://www.which.co.uk/news/2020/04/coronavirus-and-renting-what-does-it-mean-for-my-rights-as-a-tenant/ https://www.youtube.com/watch?v=H6O6srJxoiE https://www.msn.com/en-us/news/us/despite-federal-ban-landlords-are-still-moving-to-evict-people-during-the-pandemic/ar-BB12HZ52

Yes

The COVID-19 pandemic, with a third of the world's population in lockdown, has caused the largest global recession in history. If China is anything to go by, the lock-down response to the virus has crippled the automotive industry, a common barometer for a countries economic health. The decline in Chinese sales is already having a trickle down effort also, with European airlines and luxury-goods makers experiencing big losses. Waves of bankruptcies are expected in China, causing trickle down effects globally as Chinese consumers now make up a larger proportion of global consumption, due to the countries economic growth. The pandemic has caused massive economic downturns, we have seen supply chains and distribution problems, plummeting consumption and employment, panic buying and price gouging, food, grocery and pharmaceutical shortages and global stock market crashes.

According to Jon Cunliffe, Deputy Governor at the Bank of England, “if it's a pure adverse supply shock, there is not much monetary policy can do”. There is a real concern to investors, uncertainty is the worst thing for markets and causes investors to be more hawkish, and will cause damage to growth and innovation for a prolonged period of time. Most worrying though is the picture painted by unemployment figures, with the UN's International Labour Organisation has predicted the equivalent of 195 million full-time jobs will be lost internationally. If this leads to widespread unemployment over a protracted period this raises the changes of recession turning into economic depression.

jalopnik.com/the-coronavirus-is-hitting-chinas-car-market-hard-1841660308 marketwatch.com/story/european-airlines-and-luxury-goods-makers-hit-hard-as-chinas-coronavirus-spreads-2020-01-27 zawya.com/mena/en/economy/story/Central_banks_cannot_offset_coronavirus_supply_shock__BoEs_Cunliffe-TR20200227nS8N28U00OX6 businessinsider.com.au/countries-on-lockdown-coronavirus-italy-2020-3 ft.com/content/d78b8183-ade7-49c2-a8b5-c40fb031b801

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Jul 4
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DH edited this paragraph
https://jalopnik.com/the-coronavirus-is-hitting-chinas-car-market-hard-1841660308 https://www.marketwatch.com/story/european-airlines-and-luxury-goods-makers-hit-hard-as-chinas-coronavirus-spreads-2020-01-27 https://www.zawya.com/mena/en/economy/story/Central_banks_cannot_offset_coronavirus_supply_shock__BoEs_Cunliffe-TR20200227nS8N28U00OX6/ https://www.businessinsider.com.au/countries-on-lockdown-coronavirus-italy-2020-3 https://www.ft.com/content/d78b8183-ade7-49c2-a8b5-c40fb031b801

No

There has already been a bounce back from the stock market damaged caused by coronavirus uncertainty, with the Dow Jones Industrial Average experiencing a historical point gain in early March, its highest percentage gain since 2009. On the contrary, market dips were due to travel bans, event closures and cancelations, which could be exactly what helps to defeat the virus, which is in the long run the most important outcome. Invesco, a large US based investment firm, assume the impact will be relatively minor, it found in a recent study that “financial conditions thus far remain exceedingly easy compared to the starts of each of the past three recessions” [1]. In the long run there will surely be a market bounce back once the situation is under control and concerns have passed, and a dip due to people moving around less indicates the outbreak moving in the right direction, this could be evidence the global economy will not fall prey to the coronavirus as well.

While the pandemic will of course decimate certain industries, such as international travel, but it will affect different industries differently, some business have boomed due to the pandemic, such as Amazon, Zoom, UberEats, and Netflix. For some of these businesses this means more jobs and more ongoing business as education and business is likely to continues on online for some time. These changes may see a shift of growth into new areas and we may see a rearrangement of the global economy more than a recession, with a reallocation of labour and capital to these new emergent businesses and industries that are stronger because of the pandemic. It will also affect different areas differently, just as some countries handled the virus much better than other so will some economies handle it better. It may be the case that some economies fall into long recession, but this will not effect countries that have dealt with the virus more efficiently and been able to return to economic normality more quickly.

news.yahoo.com/dow-rebounds-greatest-1-day-213930614.html forbes.com/sites/simonconstable/2020/02/26/dont-panic-yet-coronavirus-will-not-cause-recession-invesco-says/#66a7d2d823d7 bbc.com/news/business-52383193

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Jul 4
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DH edited this paragraph
While the pandemic will of course decimate certain industries, such as international travel, but it will affect different industries differently, some business have boomed due to the pandemic, such as Amazon, Zoom, UberEats, and Netflix. For some of these businesses this means more jobs and more ongoing business as education and business is likely to continues on online for some time. These changes may see a shift of growth into new areas and we may see a rearrangement of the global economy more than a recession, with a reallocation of labour and capital to these new emergent businesses and industries that are stronger because of the pandemic. It will also affect different areas differently, just as some countries handled the virus much better than other so will some economies handle it better. It may be the case that some economies fall into long recession, but this will not effect countries that have dealt with the virus more efficiently and been able to return to economic normality more quickly.

Yes, and worse a healthcare catastrophe

The recession will be the least of an average citizens concerns if the pandemic continues as it seems to be, with the worst hit countries being the ones with the oldest populations and/or the least public healthcare infrastructure. The lack of public healthcare in the United States for example looks set to send the country into a healthcare catastrophe, which might have already occurred in states like New York, where almost half of the cases reported have originated so far. Widespread inequality-induced poverty means that it will probably spread quicker here than anywhere else, as health in America can only be as safe as that of the worst insured during a highly contagious pandemic. Such a catastrophe could be much more costly and damaging to the economy than recession and could cause an extended depression, with the cost to life being much greater.

This could be even more drastic for poorer economies with a similarly lacking public healthcare plan. This can be seen most tragically in South America, in Brazil especially but also in Ecuador on a per capita basis, with some of the worst levels of viral outbreak in the world and hugely vulnerable indigenous and poor communities that have little, if any, access to healthcare. While the human damage is linked to economic damage in many ways the cos of human life should not be downplayed. The Brazilian president Jair Bolsonaro has repeated disregarded COVID-19 as a "little flu", but the human cost will dampen labour force strength and consumer confidence for years to some, for now the economies of the worlds are in the pandemics hands. The human damage should be seen with just as much gravity as the economic damage which will be global, and will only lead to further health suffering if governments fail to adequately address this issue.

ft.com/content/0f738974-6c63-11ea-89df-41bea055720b twitter.com/AnandWrites/status/1233041575414050817 ccn.com/coronavirus-pandemic-could-spark-a-global-depression-warren-buffetts-shopping-spree barrons.com/articles/coronavirus-recession-depression-us-economy-51584481953 cepr.net/brazil-favela-residents-and-indigenous-communities-among-those-most-at-risk

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Jul 4
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DH edited this paragraph
The recession will be the least of an average citizens concerns if the pandemic continues as it seems to be, with the worst hit countries being the ones with the oldest populations and/or the least public healthcare infrastructure. The lack of public healthcare in the United States for example looks set to send the country into a healthcare catastrophe, which might have already occurred in states like New York, where almost half of the cases reported have originated so far. Widespread inequality-induced poverty means that it will probably spread quicker here than anywhere else, as health in America can only be as safe as that of the worst insured during a highly contagious pandemic. Such a catastrophe could be much more costly and damaging to the economy than recession and could cause an extended depression, with the cost to life being much greater.

No, they are doing to same thing as 2008 and it will work for now…

A financial crisis is just one aspect of the coronavirus, it is firstly a biological crisis, it is an economic crisis as people are being told to stay home and businesses are forced to closed, and there is the growing possibility of a social crisis as people are placed under greater pressure and stricter measures as the pandemic worsens. The 2008 recession was addressed by bailing out many of the failing financial organisations that led to it, and coming up with a money printing playbook that artificially inflates markets to ridiculous degrees to ride out a financial crisis. This is what is happening again with Trump’s $2.2 trillion stimulus bill, making a full financial crisis unlikely, however just like 2008 this is a massive expansion of Wall Street corporate hegemony, effectively giving trillions in free money to corporate power to invest and consolidate after the crisis.

The global finance markets are U.S. dominated, and the 2008 financial crisis was caused by the deregulation of financial services that led to a collapse of the American subprime mortgage market causing a domino effect that went global. This crisis was addressed in the US through programs such as TARP (Troubled Asset Relief Program) in which the government purchased toxic assets to strengthen the financial sector. However a large amount of this money found its way to government lobbying expenses and campaign contributions, while a significant amount paid executive bonuses. Likewise this bailout will cause the majority of money flow upward targeting large businesses and corporations, the companies best suited to surviving this economic crisis, while giving small provisions to small businesses, healthcare, and individual taxpayers.

Trump and congress are using this health tragedy to profit their corporate donors, while ignoring the very real health crisis and possible social crisis the pandemic is beginning to lead to. Hundreds of thousands of people will die in the bigger picture here, but the reaction of America's leadership is the same as the Great Recession, to make it easier for the Federal Reserve to bail out Wall Street and banks. In this way the US government are bailing out the people that need it the least, while average citizens get 12-hundred dollars, and the government fails to meet the need of the pandemic. This can only end in greater instability in the US, economic crises may be averted, but the sick system that the US economy is looks set to become even more unequal.

thebalance.com/what-caused-2008-global-financial-crisis-3306176 moneymetals.com/podcasts/2020/03/27/senate-passes-22-trillion-bailout-001996 facts-are-facts.com/news/the-federal-reserve-is-privately-owned trtworld.com/americas/trump-signs-2-2-trillion-stimulus-package-34919 reuters.com/article/us-usa-bailout-lobbying/u-s-bailout-recipients-spent-114-million-on-politics-idUSTRE51377B20090204?feedType=RSS&feedName=politicsNews

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D H
Jun 26
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DH edited this paragraph
Trump and congress are using this health tragedy to profit their corporate donors, while ignoring the very real health crisis and possible social crisis the pandemic is beginning to lead to. Hundreds of thousands of people will die in the bigger picture here, but the reaction of America's leadership is the same as the Great Recession, to make it easier for the Federal Reserve to bail out Wall Street and banks. In this way the US government are bailing out the people that need it the least, while average citizens get 12-hundred dollars, and the government fails to meet the need of the pandemic. This can only end in greater instability in the US, economic crises may be averted, but the sick system that the US economy is looks set to become even more unequal.

The economic relationship with the environment

The massive economic strain caused by the COVID-19 pandemic is causing some to question the unsustainable nature of the global economy, and rightly so as the search for constant growth and the constant push ever further into the natural world for different niches to exploit may have directly led to this global pandemic. But during all the turmoil some key developments are emerging, workers protested against dangerous working conditions in hospitals and Amazon warehouses, while the term “key worker” came to redefine the value of many critical jobs that have long been financially and socially undervalued. Such trends could cause a change in how we understand and value labour in society, and questions surrounding class and societal structure are likely to linger long after the pandemic.

Likewise the plunging of the oil industry is bound to have long-term effects both economically and socially, with many holding out hope that a collapse in oil could lead to a renewable energy revolution, if governments could use the pandemic to invest in new technologies. More important than recession this global pandemic may have already shed light on much bigger environmental and economic fractures in the global system, in this way the pandemic may have cause revolution just as easily as recession. The pandemic has clearly demonstrated how shutting down parts of the global economy can have a positive effect on the environment, we are now left with the time to choose do we want to continue to pursue growth at the expense of the planet's, and indeed our own, health.

aljazeera.com/ajimpact/coronavirus-save-planet-changing-economics-200420071031675.html buzzfeednews.com/article/ryanhatesthis/after-coronavirus-it-will-not-go-back-to-normal oilprice.com/Alternative-Energy/Renewable-Energy/Oil-Price-Crash-Opens-A-Window-Of-Opportunity-For-Renewables.html

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Jun 15
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DH edited this paragraph
https://www.aljazeera.com/ajimpact/coronavirus-save-planet-changing-economics-200420071031675.html https://www.buzzfeednews.com/article/ryanhatesthis/after-coronavirus-it-will-not-go-back-to-normal https://oilprice.com/Alternative-Energy/Renewable-Energy/Oil-Price-Crash-Opens-A-Window-Of-Opportunity-For-Renewables.html
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