The Buzz | Governments warned to coordinate international virus response
The economic fallout from the coronavirus could linger a lot longer and prove far more damaging without international policy coordination, according to Bank for International Settlements staff.
“No one can hide from the consequences of a pandemic, and unilateral macroeconomic policies are doomed to fail,” Emanuel Kohlscheen, Benoit Mojon and Daniel Rees wrote in a bulletin published by the Basel-based institution yesterday.
In the study, they looked at various scenarios taking into account economic spillovers across major economies.
In one model, a “more severe” initial economic hit plus a second wave of the virus, U.S. GDP would be close to 12% below its non-virus level by the end of 2020. In the “less severe” scenario, and with the virus contained quickly, the trough comes this quarter, and is limited to about 5%.
The authors warn that disjointed national efforts raise the chance of a second outbreak wave.
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