Now that political leaders have committed to minimising spread and death rates through extreme lock down measures and will achieve success in many countries, it will be very hard to dial that back. As lock downs lift slightly many people will having been given an inch so they will take a mile creating outbreaks. The coronavirus seems very sneaky and easy to spread. So the causes of our economic troubles will linger. Even sensible trade offs between economic impacts and control measures will tend to err on the side of caution. Opening up the economy will be fraught with real and imagined danger. Group activities may take a long time to be back to normal. Risk aversion will be high flattening a myriad of economic impulses.
In a crude analogy, the economic spiderweb has had a spray of sand thrown at it breaking threads everywhere and leaving grit to clog up its finely links patterns. Some weak spots are obvious. Many are hidden or just starting to fray. But as the spider of the market busily tries to rebuild the web it will be disrupted many times over but by new sprays of sand from internal and external sources creating unpredictable new thread breakages.
stimlus and support can hold the web in some sort of functional shape but it will be a gar cry from what it wad for quite some time. V shaped recovery seems unlikely but will be jawboned just like greenshoots were almost from a week after Lehman. Light at the end of the tunnels will be the meme this time.
