New lockdowns in Europe could lead to an economic crisis, according to leading macroeconomic influencers

22 September 2020 (Last Updated September 22nd, 2020 08:29)

New lockdowns in Europe could lead to an economic crisis, according to leading macroeconomic influencers
Credit: Shutterstock.com.

Countries across Europe including the UK, Spain and France are witnessing a surge in the number of Covid-19 cases. Some of these countries have just started showing signs of economic revival and new lockdowns to control the recent surge in cases may have serious consequences. Macroeconomic influencers share their views on the Covid -19 impact.

Daniel Lacalle

Daniel Lacalle, chief economist at Tressis SV, shared his article on the possibility of imposing new lockdowns in Europe. Countries such as France and Spain are witnessing a rise in Covid-19 infection cases, which may call for new lockdown measures to control the outbreak.

Lacalle notes the lockdowns will have devastating impact on the economy through jobs losses and business insolvencies. Countries such as South Korea, Taiwan, Sweden, and Austria have implemented effective measures to control the pandemic instead of implementing a total lockdown, the article noted.

Lacalle added that economies in Europe will not be able to survive a new series of lockdowns as it may lead to an economic crisis characterised by massive job losses, highly indebted corporations, and record high government debt.

Justin Wolfers

Justin Wolfers, professor at the University of Michigan, shared an article on the impact of the US President Donald Trump’s orders on cutting short the schedule for the 2020 Census. The Census Bureau has noted that reducing the time for the Census can lead to critical data problems with regard to the national head count and the data could look manipulated.

The government had previously extended the timeline for the Census in view of the Covid-19 pandemic. Census officials are now under increasing pressure from the Trump administration to abandon the extended timeline and complete the counting by September.

The Census Scientific Advisory Committee has noted that the timeline be extended as the results are essential for making crucial decisions apart from being used for regulatory purposes.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on views expressed by Terry Branstad, the outgoing US ambassador to China, on China’s mishandling of the Covid-19 outbreak.

Branstad noted that the outbreak could have been limited in Wuhan but instead led to a global pandemic. He criticised the Chinese government for its actions including covering up of the outbreak and penalising doctors for stating the possibility of an outbreak.

Branstad views echo those of President Donald Trump, which has since led to a spike in tensions between the two countries. China plans to implement restrictions on diplomats from the US, while the US also plans to implement similar restrictions.

Ian Bremmer

Ian Bremmer, a political scientist and author, shared an article on how the Covid-19 pandemic is expected to increase the unequal access to the internet and technology across the world. The pandemic has accelerated the use of digital technology but millions of people still do not have access to technology.

The pandemic has led more than 50% of the world’s population to use the internet and technology, but connectivity in the developing world still remains unreliable and expensive. Governments in developing countries lack the financial incentive to invest in broadband and the economic crisis triggered by the pandemic is expected to further discourage investments.

The article notes that people who can or learn to work remotely can thrive amid the economic crisis created by the pandemic, while others will have a much harder time.

Stephany Griffith-Jones

Stephany Griffith-Jones, an economist specialising on financial crises, shared an article on how the number of Covid-19 cases in the UK may increase to 50,000 cases per day by October if necessary measures are not taken.

The UK government’s chief scientific adviser Sir Patrick Vallance has noted that the resurgence in cases may lead to more than 200 deaths per day. He noted that the infection numbers are doubling every seven days.

Vallance added that necessary actions are needed to curb the infection rate or the number of cases will continue to increase. The government is not considering a nation-wide lockdown to curb the cases but region-wise restrictions may need to be implemented.