Dear Manoj,

Though most stock markets (and oil prices) have nosedived recently, the transitory effects will have prolonged impacts on economies and companies’ earnings because of Covid-19 pandemic and health crisis.

This is also evidenced by the fact that the Fed decreased very recently interest rates to zero levels and the markets keep nosediving. This is an indication that markets are already far sighting and factoring the long-term impacts of current world events because of Covid-19 pandemic and the resultant health crisis.

I am afraid, but current world events will have major impacts on countries and companies’ earnings, which will definitely led to many bankruptcies worldwide.

The recovery from the economic impact of the Covid-19 health crisis will take lot of efforts and prolonged period of time.

Prof. Dr. Mazin A. M. Al Janabi

Full Professor of Finance & Banking and Financial Engineering

EGADE Business School, Tecnologico de Monterrey,

Santa Fe Campus, Mexico City, Mexico.

It shouldn't be in my opinion. Because we have advanced far more forward to overcome this successfully.

It appears to me that the recovery is on the way , the stock market is almost where it was before the crisis, , oil and gas prices are back up to near pre-crisis levels. I think many people though, lost their jobs, especially in the travel, accommodation, food industries. Many small companies did not have enough in reserve to "weather the storm", so to speak. People living "on the financial edge" are also having a bad time right now. The problem is, the Pandemic is not over. Phase Two, or the second upstroke (similar to 1918) has not yet happened. As predicted that it will be much worse than Phase One was, that will be when the depression will start. This can be circumvented by the distribution of a good vaccine. Thank you and good luck, stay safe.

Thank You Mazin A. M. Al Janabi Charles Ganaprakasam Gary Joseph Ordog for your views !!!

When the SARS-CoV-2 coronavirus pandemic (causing Covid-19 disease) developed most dynamically on a global scale and the first cases of Covid-19 incidence were detected in many countries (March - April 2020), then forecasts of a strong decline in economic growth with the possibility of global recession and analogy to the Great Economic Crisis in the 1930s and the financial crisis in 2008. However, in the period May - June 2020 there was a lot of data suggesting that the pandemic is entering a phase of stabilization and / or expiration in many countries. In addition, so-called economic anti-crisis shields involving the launch of high-budget anti-crisis programs and instruments, socio-economic interventionist policies, including pro-development monetary, fiscal, budgetary and social policies, etc. In this way, the scale of the economic decline has been significantly reduced, many jobs have been saved in both public and commercial sectors. Due to the above, the current (June 2020) forecasts for economic slowdown are not so negative in their content as compared to analogous forecasts prepared and published 3 months earlier.

Best wishes,

Dariusz Prokopowicz

Thank you Dariusz Prokopowicz for your view !!!

In countries that are getting to the closing phases of the virus infection, business is picking up and employment increases. However, countries with a rise in infections the employment slowly is improving. It doesn't look very bad right now and possible financial crises are only local and maybe temporary.

There are fundamental difference between this crisis and previous ones. One difference is that (using a standard aggregate demand-aggregate supply model) the usual crises, including the ones mentioned in the question, there was a shock which affected aggregate demand but in this case part of the shock (due to major government restrictions) was and continues to be to aggregate supply. Changes in expected profits and personal incomes shocked aggregate demand as well. The usual tools for dealing with a recession, monetary and fiscal, mostly affect aggregate demand. Special provisions in this case (like-US- loans that do not need to be repaid if employment is maintained) may affect supply as well but the ability to affect AS is doubtful and not well researched.

The other major difference is that while uncertainty is ever present in the world in this case the source is a so far somewhat unpredictable pandemic which may or may not cause restrictions to be restored after removal and which continues to make revenue streams much more uncertain that usual. Any recovery could be reversed due to expansion of the first wave or the arrival of a second wave.

A longer recession is most likely for the coming 4-5 years, until new investment directions will open up, which will be mainly connected to human health.

https://healthmanagement.org/c/healthmanagement/issuearticle/health-the-economic-growth-engine-of-the-21st-century

In my previous comment I neglected to mention that for the US there is a strong likelihood of a negative fiscal shock as States and municipalities with strong balanced budget constraints (often constitutional) force large scale (100s of billions) spending cuts. Absent additional support from the national government this shock is almost assured and that does not bode well for late 2020 into 2021

We see many people scared of going out. This may have long term impact on the hospitality sector. We also see Congress not acting, so the recession will continue as CARES and PPP money runs out.

Six months have passed since I wrote my previous comment. In this connection, I would like to add a few words. The economic crisis caused by the Sars-Cov-2 (Covid-19) coronavirus pandemic is in some ways similar to the Great Depression of the 1930s and the 2008 global financial crisis. The greatest number of similarities occurred in the second and third quarter of 2020. The similarities concern not only the economic and macroeconomic effects of the economic crisis, but also the applied anti-crisis instruments, Keynsian socio-economic, budgetary, fiscal and monetary policy.

Best regards,

Dariusz Prokopowicz