'We Are Only At The Beginning Of The Coronavirus' Says Economic Historian, DW News From Germany
'We are only at the beginning of the coronavirus crisis,' says economic historian. The economic impact of the coronavirus is similar to the situation during both world wars. It could even match the despair of the Great Depression. Still Germany is well prepared, says Albrecht Ritschl in a DW interview. DW, April 1, 2020. ~ Albrecht Ritschl is a professor of economic history. He has been at the London School of Economics since 2007.
DW: You are a historian and study economic crises. In a few words, what are the key points of an economic crisis? Albrecht Ritschl: Falling demand, a slump in production, mass unemployment, financial crisis and then a sovereign debt crisis usually follows.
Where do we stand in the current economic crisis? We are only at the beginning of the crisis. It can get as bad as the Great Depression of the early 1930s. A decline in gross domestic product of around 20% is also not entirely out of the question. The outlook is bleak and depends on how long the quarantine measures last.
The economy is almost completely frozen as almost all activities have stopped. Has this ever happened before? No comparison really works. The closest thing is the comparison with war economies. During the world wars, restaurants and small shops were closed everywhere. The reason for this was, of course, that people wanted to free up resources for the war economy. We don't have that now, that is the big difference. Nevertheless, one can already say that some areas could shrink in a similar way. At that time, certain parts of the economy declined by up to 70%.
Nevertheless, one can already say that some areas could shrink in a similar way like during the wars. At that time, certain parts of the economy declined by up to 70%.
How long can we handle such an economic standstill? Of course, we are all thinking about when we may face supply shortages or social unrest. And you can see that politicians around the world are panicking. We see this most clearly with the American president — he is trying to save his skin by promising to start the economy again after Easter. Nobody knows how he got this idea, but it is often the case that political calculation works differently than that of an expert...
More, https://www.dw.com/en/we-are-only-at-the-beginning-of-the-coronavirus-crisis-says-economic-historian/a-52964637
