Global Economy: Recovery Slowing Down: DIW Economic Outlook

[Emily]

Can't find a date but this appears to have been written right before things took a turn for the worse with lockdowns so the second scenario seems the one we are heading into.

https://ideas.repec.org/a/diw/diwdwr/dwr10-50-2.html

Claus Michelsen & Paul Berenberg-Gossler & Geraldine Dany-Knedlik & Hella Engerer & Sandra Pasch, 2020. "Global Economy: Recovery Slowing Down: DIW Economic Outlook," DIW Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 10(50).

The present forecast assumes that the containment measures
implemented in many countries will slow the spread in
the short-term and prevent further uncontrolled, significant
increases in the infection rate. New, expansive lockdowns are
thus not assumed. In the first half of 2021, it is likely that
containment measures will slowly be relaxed and replaced
by gradual herd immunity. A moderate recovery can therefore
be expected in the further course of the forecast. Global
production will therefore probably reach its long-term growth
path at the end of the forecast period.

For example, global infection rates could continue to increase markedly
despite containment measures, which would slow down the
recovery process. Stricter containment measures that last
into 2021 would be necessary and would lead to renewed
slumps in economic output. A further risk is that there will
be a sharp increase in corporate and private insolvencies in
2021, which could lead to considerable loan defaults that
would destabilize the financial markets, endangering the solvency
of several countries. The recovery process in Europe is
also likely to be slowed down considerably if an agreement
between the EU and the United Kingdom fails despite the
last agreement in the negotiations. Effective, faster containment
of the pandemic through rapid herd immunity would
strengthen the global upswing.

 

[sharon sanders]

bump this