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Why a Coronavirus Recession Would Be So Hard to Contain

davfordavfor
in The OT Bullpen
This article discusses some of the reasons a long lasting coronovirus outbreak could prove to be quite costly to the US economy. Here are a few excerpts:
If a recession happens, it will probably be a result of this poor fit between the economic effects of the potential pandemic and the mechanisms the government uses to try to keep the economy growing.

Companies in China that have shut down because their workers are quarantined are not making goods. That could eventually mean shortages of certain items for which there are few sources of elsewhere in the world.

“If first the store is empty of products, and then people don’t go to the store anymore and they lose their jobs, they can’t buy anything,” Ms. Sinclair said. “That’s what we’re risking here.”

If coronavirus were to spread widely in the United States, and officials decided to impose widespread quarantines, the economic impact is hard for economists to model. What happens to a service economy if people can’t safely travel, go shopping, or even go to work? The answer is no one really knows.
https://nytimes.com/2020/02/29/upshot/coronavirus-recession-US.html

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