The COVID-19 Symmetric Shock, and Its Asymmetric Consequences

20 Pages Posted: 2 Jun 2020

See all articles by Miriam L. Campanella

Miriam L. Campanella

University of Turin

Winston Dookeran

The University of the West Indies

Date Written: June 2, 2020

Abstract

The outbreak of the COVID-19 pandemic is opening a period of policy uncertainties upon all us. The upcoming massive recession presents critical economic and financial variables, a steep rise of jobless claims, fixed-asset investment falling by 45% year on year, capital outflows from emerging markets by $ 83 bl. Buffers and shock absorbers are weak in several emerging and developing countries, and preventing the worst case scenario, a lengthy L shape recession, the size of the fiscal injection must be equivalent to the fall in the GDP. What can Caribbean countries do to mitigate the full impact of the pandemic tsunami? Jointly to Multilateral Development Banks, Caribbean governments should require core G20 Members to repurpose climate change investment plans, and, abide by their commitments. Lacking these actions, the COVID-19 shock would develop into a demand-driven slump, opening the door to a long stagnation.

Keywords: Size of the Crisis; Shapes of the Recession; Finance Sources

Suggested Citation

Campanella, Miriam L. and Dookeran, Winston, The COVID-19 Symmetric Shock, and Its Asymmetric Consequences (June 2, 2020). Available at SSRN: https://ssrn.com/abstract=3616834 or http://dx.doi.org/10.2139/ssrn.3616834

Miriam L. Campanella (Contact Author)

University of Turin ( email )

Via Po 53
Torino, Turin - Piedmont 10100
Italy

Winston Dookeran

The University of the West Indies ( email )

St. Augustine
Cave Hill Campus
St Michael
Trinidad and Tobago

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