Covid-19 has left many patients with debilitating symptoms after the initial infection has cleared. This is “long Covid”. What is true of health, risks being true of the economy too. The pandemic is likely to give the world not just a deep recession, but years of debility. To meet the threat of a “long economic Covid”, policymakers must avoid repeating the mistake of withdrawing support too soon, as they did after the 2008 financial crisis.
This danger is real, even if there remains much uncertainty about how the crisis will unfold. Not least, we do not know how soon or completely Covid-19 will be brought under control.
Yet we do already know many things about the economic impact of the pandemic. We know it has inflicted a huge global recession; that the economic costs have been greater for the young, the unskilled, minorities and working mothers; and that it has badly disrupted education. We know, too, that “close to 90m people could fall below the $1.90 a day income threshold of extreme deprivation this year”, as the IMF has put it.