Wednesday August 5, 2020

Coronavirus could give the next recession a 1970s feel

A shock to global supply chains and a retreat behind national borders could ultimately push inflation up, not down

4th March, 2020
A police officer watches disinfection work at Huanan Wholesale Seafood Market. The Chinese government has essentially locked down Hubei province. Picture: Visual China Group via Getty Images

It is too soon to predict the long-term arc of the coronavirus outbreak. But it is not too soon to recognise that the next global recession could be around the corner – and that it may look a lot different from those that began in 2001 and 2008.

For starters, the next recession is likely to emanate from China, and indeed may already be under way. China is a highly leveraged economy; it cannot afford a sustained...

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