Coronavirus: Leading Economist Warns of 10 Years of Depression & Debt

'Coronavirus: Leading Economist Warns of 10 Years of Depression And Debt,' BBC News, 5/22/20.

Economist Nouriel Roubini has warned of a prolonged downturn and sluggish recovery from the coronavirus. Nicknamed Dr Doom for his gloomy predictions, Professor Roubini said there are some jobs that simply will not come back after this crisis.

Even if the global economy recovers this year from the impact of the coronavirus, it will be "anaemic". He warned of "unprecedented" recession. Professor Roubini foresaw the financial crisis in 2008 before many others.

"During the global financial crisis it took about three years until output fell sharply," he told the BBC's Talking Asia programme from his home in New York. "This time around it didn't take three years, not even three months. In three weeks there was a freefall of every component."

- DRASTIC

Professor Roubini also said any recovery will be in the shape of what economists call a "U", or even "something closer to an L" - what he calls a "Greater Depression."

A U-shaped recovery means that growth will fall and bottom out, and then pick up only after a prolonged period of slow or no growth. An L shaped recovery is even more drastic - falling sharply and staying there for an extended period of time.

That's because of how many jobs have been lost in both rich and poor countries as a result of massive lockdowns to combat the virus. "These jobs that are gone are going to come back only in part, with lower wages, no benefits, part-time," he said.

There will be even more insecurity of jobs and income and wages for the average working person."

- BOUNCING BACK?

His warning comes as the number of coronavirus cases globally tops five million, with many countries seeing a second wave of infections and struggling to reopen their economies - a key factor in whether economic growth can bounce back quickly.

"You can open the stores but the question is whether they're going to come back," he says. "Most of the shopping centres in China are still empty. Half of the flights aren't there. German shops are open but who wants to go and shop?"

Emerging Asia though will see better growth than "other advanced economies."...

More, https://www.bbc.com/news/business-52752172




- American economist Nouriel Roubini. https://en.wikipedia.org/wiki/Nouriel_Roubini

- Also: 'The Coming Greater Depression Of The 2020s,' Nouriel Roubini, April 28, 2020
https://www.project-syndicate.org/commentary/greater-depression-covid19-headwinds-by-nouriel-roubini-2020-04