In the News

Can we avoid an economic Long Covid?

Graham Watson

23rd February 2021

The BBC's Faisal Islam reflects upon the pace at which lockdown is being eased and wonders about whether it might prolong the economic agony.

I wonder whether this is a false dichotomy: is it the case that economic growth and public health are trade-offs, or is it imperative that we tackle the public health issue so that we can have economic growth?

The other issue is that evidence from other economies, notably Australia and Israel, is that even after lockdown has lifted social activity remains low relative to pre-lockdown levels and it makes you wonder about the extent to which there really is pent-up demand in the economy at this point in time.

Will the rate of inflation speed up?

Larry Elliott writes here in the Guardian that there's some possibility that inflation might tick up as lockdown ends, although I'm not sure he believes this himself.

However, he is right that it's been interesting to see a diversity of views about the future prospects for the economy and he counsels against the danger of groupthink, although Andy Haldane and Jan Vlieghe, both members of the MPC, seem to be a guarantee that this won't happen in the UK.

We are at one of those moments where the future isn't clear - indeed, perhaps the unknown unknowns remain the most inevitable feature of the economy going forward.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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