The Economic Perspective: “Is It Different this Time”

Mary:    I’m Mary Walden with economist MW welcoming you to the economic perspective.  Today’s program asks if this time is different.  Mike, the coronavirus is both a medical event and an economic event.  Is this a unique combination having a unique impact?

 

Mike: Summary Answer

  • Yes – in terms of scope and depth, have to go back 100 years to the worldwide virus in 1918-20 commonly called the Spanish flu
  • Killed over 600,000 people in the US, and 50-100 million worldwide
  • Yet, there was only a mild recession
  • Reason – economy was not shut down – medical knowledge was much less than today
  • Today, with quarantines and mandated closures, we are purposefully pausing the economy in order to get control of the virus.
  • So, if a recession occurs – and I think it will – in many ways it is a recession mandated by medical goals
  • This makes it uniquely different than all other recessions
  • I’m MW

 

Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.