Economists have an abysmal record at predicting the onset of recessions. The current recession is positive proof of that fact. But this time, we can give economists a bit of a break; no one saw this recession coming. Policymakers, economists, and the medical community were caught totally unprepared for the chaos caused by Covid-19. Worldwide, the pace of an economic recovery following the Covid-19 ambush will be hard to predict.
Epidemiologists will play a key role in guiding policymakers through the health issues and subsequent labored opening of the economy. In the meantime, economists must assess the impact of the current catastrophe recognizing that there are no roadmaps or models to guide sound conclusions. Most assessments are and will be rife with guesswork.
We can try to draw some preliminary conclusions on economic conditions such as output, employment, prices, monetary policy, and fiscal policy. Keep in mind much of the data is fragmentary and, in some cases, unreliable information due to problems in data collection.
Thomas Goho, Ph.D. is formerly the Chief Economic Consultant for Stephens Inc. He also served as the Co-Director of Stephens University at Wake Forest University.