No one knows what will happen, but it sure will happen
Short-term economic impact from the outbreak will only peak later this year, and the news will be very bad
When asked what he most feared as prime minister, the late Harold Macmillan allegedly said: “Events, dear boy, events.” Recent weeks have vindicated this judgment with a vengeance.
Overwhelmingly the most important consequences of the coronavirus are the human and social costs, but there have already been serious economic and financial costs and there may yet be important political consequences too.
The short-term economic impact may not reach a peak until much later this year, and the financial effects could turn out to be much worse too. Yet, in all likelihood, after a dire period, as the virus subsides, surely economies will bounce back strongly. At some stage, financial markets will anticipate this recovery and move sharply higher too. But what lingering effects might there be after the virus has been overcome?..