Saving our livelihoods from COVID-19: Toward an economic recovery

We are now living through the most uncertain moment of our times. Many countries have been in lockdown since early March 2020. Even Japan, once a beacon of hope for controlling COVID-19, is now moving toward total isolation. Many political leaders realize that physical distancing might be the norm for at least several months. They wonder how—or if—they can maintain indefinite lockdowns without compromising the livelihoods of their people.

Political leaders aren’t alone in their fears. As the pandemic continues its exponential course, workers in most countries wonder what will become of their jobs when the lockdowns end. Businesses struggling to pay their employees and cover operational costs wonder if they will have clients or customers when they reopen. Banks and investors realize that many companies, especially small and midsize ones, will default and are trying to protect both financial stability and public savings. Meanwhile, governments are working to calculate the magnitude of the shock and sharpening their tools to save economies from collapse. They know that history will judge them by the decisions they make now.

This daunting scenario poses several basic questions. How can we save both lives and livelihoods? Which decisions are best managed by governments? How can they evaluate the risks that experts predict from a prolonged lockdown, such as starvation, domestic violence, and chronic depression—as well as protect jobs, income security, food supplies, and the general welfare of the most vulnerable people among us? How and to what extent should they try to save banks, prevent fiscal ruin, and safeguard future generations?

Governments could address all these questions strategically. In effect, they are caring for two patients who react to the same medicine—physical distancing—in very different ways. The first patient is the public-health system. Physical distancing might cure or alleviate its symptoms but could exacerbate those of the second patient, the economy. This trade-off suggests a physical-distancing strategy for governments: ensuring the health system’s ability to deal with COVID-19 and protecting the economy.

Exhibit 1 shows how different levels of physical isolation affect economic conditions. A recession could occur if faltering demand, restricted supply, and lost income reach critical levels. The differences between scenarios could be tenfold: a country that applies physical distancing in a lax way and ends it too soon could face zero GDP growth, but if the same country imposed a very strict and prolonged quarantine, GDP might plunge by 20 percent. In some Western economies, the latter scenario might increase government control of strategic sectors.

Countries can avoid the worst scenarios if they work quickly along three principal lines of action: first, minimizing the impact of physical distancing on the economy; second, spending deeply to keep it afloat; and third, spending even more to accelerate the crisis recovery and to close historical gaps.

Minimize the economic impact of physical distancing

In a recent article , we showed how different isolation strategies can have different effects on the ability of countries to save both lives and livelihoods. Policies for localized physical distancing at the regional, sectoral, or individual level might have better results than blanket lockdowns of entire countries. The time has therefore come to quantify the impact of lockdowns on people’s livelihoods.

Advanced analytics could help countries estimate—with a high level of confidence—the shock to the economy by aggregating data on power consumption, debit- and credit-card spending, applications for unemployment insurance, default rates, and tax collections. Exhibit 2 estimates the changes in demand for goods and services by using visits to Google services as a proxy. We calculate that the number of these visits in several countries fell by as much as 95 percent during the first two weeks of the lockdowns.

Individual countries that implement localized physical distancing might be able to keep track of how many people are in the streets at any given time and how much economic activity those people generate. But approaches to physical distancing will probably vary a good deal from country to country, depending on how they balance public-health issues with privacy concerns. Countries could plan prolonged lockdowns for the elderly and children and estimate their levels of consumption. They could quantify the number of employees in essential sectors that continue to operate (health, security, food and beverages, agriculture, utilities, and transportation). They could determine which regions or states should remain under complete lockdown and which sectors are operating under strict health protocols in other places. And they could track how many people are working from home in each sector and their contributions to the economy.

Analyzing a granular level of information might help countries quantify the weekly impact of physical distancing on various key indicators by region and by economic sector.

This granular level of information might help countries quantify the weekly impact of physical distancing on GDP, productivity, aggregated demand, income loss, unemployment, poverty, and fiscal-deficit levels by region and by economic sector (Exhibit 3). If countries knew all that information, they would know the cost of the lockdowns on the livelihoods of their people.

Spend deeply to keep the economy afloat

Armed with information on the economic impact of physical-distancing strategies, governments can prepare their next moves (Exhibit 4).

To recover from the pandemic’s health and economic consequences, we must uphold the social contract—the implicit relationship between individuals and institutions. The market economy and the social fabric that holds it together will be deeply compromised, or perhaps undermined, if massive numbers of jobs are lost, vendors can’t fulfill their contracts, tenants can’t make their rent, borrowers default at scale, and taxes go unpaid. Governments could therefore quantify the minimum level of income that households need to cover their basic necessities, the minimum level of liquidity that companies need to cover their costs (including payrolls) and to protect their long-term solvency, the minimum liquidity levels that banks need to support defaults, and the minimum amount of money that governments need to supply all those requirements. Let’s examine each of them.

Formal, informal, or independent workers will all have their own particular financial needs. So will vulnerable populations, such as people at higher risk of infection, which might not be able to return to work for some time. Leaders in the public sector should determine the level of support that each population segment requires and the appropriate distribution channels for fast delivery. Familias en Acción in Colombia and Janani Suraksha Yojana (JSY) in India, for example, are conditional-cash-transfer (CCT) programs that support millions of vulnerable people. Such programs could temporarily expand to cover other segments of the population, such as informal and independent workers. It might also be necessary to consolidate databases and information systems and to digitize all payments.

Since revenues have plummeted, many companies require help to safeguard employment. Their needs vary widely among sectors of the economy; professional-service firms, for example, usually have twice as many working-capital days as restaurants do. What’s more, physical distancing will affect different kinds of companies in different ways. As a first move to help them, several countries have already frozen short-term fiscal, parafiscal, and social-security payments. Some are using innovative instruments to irrigate money—for instance, capitalizing national reinsurance agencies to cover most of the expected losses from the new loans required to bridge payroll payments and working capital.

Banks can play a meaningful role during the crisis in two fundamental ways: lending money to companies in distress and recognizing that some companies simply can’t survive. If default rates on current loan portfolios skyrocket, the expected shock to incomes and to supply and demand could compromise the solvency of some banking systems. Besides thinking about loosening solvency and warranty regulations, governments might consider creative solutions, such as distinguishing among banks according to their credit portfolios to strengthen financial institutions’ balance sheets and injecting government-backed convertible loans against their long-term warrants and restructuring targets. (Governments implemented these mechanisms successfully in other financial emergencies, such as the 1997 Asian market crisis, the 1999 Latin American crisis, and, most recently, the 2008 crisis in Europe and the United States.)

Strengthening the balance sheets of banks might not be enough to deal with the aftermath of COVID-19; governments might have to use monetary expansion through debt and equity emissions backed by central banks. Countries with deeper capital markets could not only securitize loans and new instruments but also use the financial strength and long-term view of pension funds and other institutional investors to ease short-term crisis-related pressures on public finance.

Governments shouldn’t be shy about using such instruments extensively if that’s needed to keep economies running. Since such stimuli would have a cost, additional fiscal requirements could complement them in the medium term. To preserve national solvency, governments might also reexamine historical exemptions from taxation.

Spend more to accelerate the crisis recovery and close historical gaps

After countries estimate the size of the stimulus packages needed to help households, companies, and financial systems, they can start designing additional, customized programs to restore demand and accelerate recovery. People who receive direct subsidies to stay at home could gradually return to work as each sector of the economy introduced new health and behavioral practices. Meanwhile, as many workers as possible should receive new job opportunities. To provide them, governments could introduce innovative labor regulations and help companies operate 24/7 under flexible schemes. They might also turn old-fashioned CCT programs into universal-income alternatives linked to new jobs in ambitious, government-led programs for infrastructure, housing, and industrial reconversion. Each country could find its equivalent of Franklin Roosevelt’s New Deal.

Governments may also find it advisable to relax their regulatory regimes to help businesses not only reopen but also grow. Most countries have national, local, and sectoral regulations that were perfectly appropriate before the coming of COVID-19 but will be extremely expensive in the next normal. National programs to eliminate red tape at scale will help a good deal. Speed and flexibility are essential.

Businesses in sectors facing strict physical-distancing policies might need additional long-term capital. Governments could use innovative special-purpose vehicles to inject fresh equity and provide fiscal incentives to attract long-term investors. Businesses receiving that sort of aid should expect to commit themselves to restructuring: rescue packages could promote leaner operations, digital and industrial reconversions, the introduction of new channels, agile organizational structures, and innovative learning techniques. Governments could also ensure that such aid programs encourage competition—poorly designed policies that strengthen oligopolies and threaten the interests of consumers will be costly in the long run.

Although governments should carefully weigh the impact of their aggressive programs against long-term fiscal sustainability, they can play a significant role in restoring demand for goods and services and in fostering investment in new business models. Many initiatives—for instance, accelerating infrastructure projects; fast-tracking private investment to build hospitals, schools, and other social projects; encouraging urban renewal and very large housing projects; sponsoring the development of digital clusters to digitize government services; easing investment conditions to take advantage of global supply chains; capturing near-shore production opportunities; promoting large agribusiness developments; and stimulating exporting—could promote those goals. It is time to spend—but wisely.

The COVID-19 pandemic is a global tragedy. But that shouldn’t—and needn’t—prevent us from finding innovative ways to accelerate progress. It would not be the first disaster to do so. This may be the right time to introduce fiscal, labor, pension, social, environmental, and economic reforms to speed up progress toward sustainable development. Ameliorating poverty, diminishing inequality, and protecting the environment could figure prominently in global and national agendas. Governments, companies, and social organizations could act quickly to promote full financial inclusion, the transition to cashless economies, and the provision of better and more efficient social and public services. Political leaders might condition access to massive economic-stimulus programs on efforts to reduce informality, rethink healthcare systems, digitize entire sectors of the economy to accelerate productivity, and encourage digital innovation—especially high-quality public education with universal internet access.

Governments ought to act quickly. The first step is to understand the economic impact of the crisis in both the short and medium terms. Second, governments could inject the minimum viable liquidity to keep markets alive. Finally, they could expedite ambitious fiscal and monetary policies to accelerate recovery. In most economies and markets—national and international alike—ratios of debt to GDP will likely rise. Confidence that tax frameworks will gradually support next-normal debt levels will be necessary.

Once the pandemic ends, countries around the world will probably find themselves more in debt than ever. If they restructure and innovate, attract investment, and increase their productivity, a new era of human development will begin . But if they spend haphazardly and imprudently, economic and social development might falter for decades to come. The societies, governments, institutions, companies, and people of the Earth now face basic choices. Let’s hope they think about them seriously.

Andres Cadena and Fernando Ferrari-Haines are senior partners in McKinsey’s Bogotá office.

The authors wish to thank Andres Arboleda, Clara Gianola, Juan Martinez, and Sebastian Riomalo for their contributions to this article.

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COVID-19’s Economic Impact around the World

Key takeaways.

  • Although the COVID-19 pandemic affected all parts of the world in 2020, low-, middle- and high-income nations were hit in different ways.
  • In low-income countries, average excess mortality reached 34%, followed by 14% in middle-income countries and 10% in high-income ones.
  • However, middle-income nations experienced the largest hit to their gross domestic product (GDP) growth, followed by high-income nations.

COVID mask with flat map of the world on it.

Since the COVID-19 pandemic began in March 2020, the world economy has been affected in many ways. Poorer countries have suffered the most, but, despite their greater resources, wealthier countries have faced their own challenges. This article looks at the impact of COVID-19 in different areas of the world.

First, I put 171 nations into three groups according to per capita income: low, middle and high income. Second, I examined health statistics to show how hard-hit by the virus these nations were. Then, by comparing economic forecasts the International Monetary Fund (IMF) made in October 2019 (pre-pandemic) for 2020 with their actual values, I obtained estimates for the pandemic’s impact on growth and key economic policy variables.

Low- and high-income groups each compose 25% of the world’s countries, and the middle-income group makes up 50%. Average income per capita in 2019 was more than five times larger in the middle-income group than in the low-income group. In the high-income countries, it was almost 20 times larger.

Health Outcomes and Policies

The first table shows that COVID-19 had a significant impact on all three groups. Average excess mortality, which indicates how much larger the number of deaths was relative to previous years, was more than 34% in low-income countries, almost 14% in middle-income countries and about 10% in high-income countries. And even though poorer countries were more affected by deaths, their COVID-19 testing was much more limited given their smaller resources.

Since the beginning of the pandemic, high-income countries did more than one test per person, while low-income countries did only one test per 27 people (or 0.037 per person). Given the significant differences in testing, it is not surprising that reported cases were much higher in wealthier countries. Finally, note that there were significant differences in the progress of vaccination. As of June 2021, nearly 20% of the population in the wealthiest countries was fully vaccinated compared to about 2% in the poorest countries.

Impact on GDP Growth

COVID-19-related lockdowns were very common during 2020-21, directly impacting economic activity. The figure below shows the impact on GDP. To isolate the impact of COVID-19 from previous trends, I plotted the difference between the actual GDP growth in 2020 and the IMF forecast made in October 2019.

The immediate consequence of closing many sectors of the economy was a significant decline in GDP growth, which was as large as 8.7 percentage points for the median middle-income countries. Wealthier countries suffered a bit less, with a median of 6.4 percentage points, mainly because they began to recover before the end of 2020. The impact of COVID-19 was smaller in poorer countries because many did not have the resources to implement strict lockdowns. However, even in this group of countries, median GDP growth was 5.2 percentage points lower than expected.

Impact of COVID-19 on GDP Growth around the World

SOURCES: IMF World Economic Outlook Reports (April 2021 and October 2019), Penn World Table (version 10.0) and author’s calculations.

NOTE: The COVID-19 impact is the difference between the actual gross domestic product growth rate in 2020 and the IMF forecast for it made in October 2019.

Economic Policies

Differences in GDP performance are not only related to lockdowns but also to economic policy responses. The second table contains information about six policy variables.

In particular, the first three rows present the fiscal response to the pandemic computed as the difference between the actual value in 2020 and the IMF forecast made before the pandemic in October 2019 relative to GDP. Revenue relative to GDP declined slightly in all regions, but mostly in middle-income countries, reaching more than 1 percentage point of GDP.

Expenditures relative to GDP, however, increased in middle- and high-income countries while remaining stable in low-income countries. These expenditures increased by nearly 7 percentage points of GDP in high-income countries. The more significant fiscal deficit relative to GDP implied a larger increase in net government borrowing, which reached 7 percentage points of GDP in the median high-income countries.

Finally, COVID-19 also had a clear impact on the evolution of monetary aggregates such as cash and deposits. In the table, to isolate the impact of COVID-19 from previous trends, I present the growth rate of M1 and M2 M1 generally includes physical currency, demand deposits, traveler’s checks and other checkable deposits. M2 generally includes M1 plus savings deposits, money market securities, mutual funds and other time deposits. Note that the above definitions can differ slightly by country. net of the yearly growth rates of these variables between 2017 and 2019. The pandemic implied an increase in the growth rate of monetary aggregates across countries in all income groups, but more significantly in wealthier countries.

For instance, the growth rate in M1 was over 10 percentage points larger than in the previous two years in the median high-income countries. Without a change in money demand, such an acceleration in the quantity of money would have implied increasing inflation.

However, the last row of the table shows that inflation remained stable in 2020. In fact, for middle- and high-income countries, inflation in 2020 was lower than the IMF forecast made in October 2019.


COVID-19 impacted health outcomes in all regions of the world. Wealthier countries responded with more testing and quicker vaccination rates. Comparing actual outcomes with pre-pandemic forecasts, I found a significant impact of the pandemic on GDP growth, which is more prominent in middle-income countries.

I conjecture that the impact on GDP growth was less significant in the poorest countries because of less restrictive lockdowns and in the wealthiest countries because of more aggressive economic policies.

  • M1 generally includes physical currency, demand deposits, traveler’s checks and other checkable deposits. M2 generally includes M1 plus savings deposits, money market securities, mutual funds and other time deposits. Note that the above definitions can differ slightly by country.

Juan Sanchez

Juan M. Sánchez is an economist and senior economic policy advisor at the Federal Reserve Bank of St. Louis. He has conducted research on several topics in macroeconomics involving financial decisions by firms, households and countries. He has been at the St. Louis Fed since 2010. View more about the author and his research.

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How COVID-19 has changed the global economy

Chicago booth scholars discuss what recovery might look like in the wake of a pandemic.

The worldwide economic landscape has changed dramatically over the past four months, as the COVID-19 pandemic has stalled activity in nearly every corner of the world. 

With these dramatic changes in mind, the University of Chicago Booth School of Business has convened its inaugural virtual Economic Outlook, focusing on the U.S., Asia and Europe in three events over three weeks.

During the April 30 debut of the online series, Profs.  Randall S. Kroszner ,  Austan D. Goolsbee  and  Raghuram G. Rajan  discussed the critical economic questions facing the world amid the COVID-19 crisis.

Moderated by Kathleen Hays of Bloomberg, the conversation ranged from the possible paths and pitfalls for recovery, to how economic sectors such as manufacturing and hospitality will fare, to concerns about incurring debt.

While much uncertainty remains, the Chicago Booth economists shared their perspectives and concerns around key questions facing business leaders, policymakers, employees, and families worldwide. Portions of the first event are highlighted below.

How have stay-at-home orders affected economies?

With tens of millions of unemployment claims in the United States, as well as more than 100 million jobs lost in India, global economies are suffering.

“We sent everyone home. We didn't allow people to go out and buy anything,” said Kroszner, a former governor of the Federal Reserve System who serves as Booth’s deputy dean for executive programs and Norman R. Bobins Professor of Economics. “So it's not a surprise that you get this astonishing contraction in demand and production.”

Hoping for a ‘reverse check mark’

A former chair of the Council of Economic Advisers and a member of President Barack Obama's cabinet, Goolsbee warned that a traditional recession recovery is a slow process.

“We could go from less than 4% unemployment to 15% in a short period of time. In a normal recovery, the unemployment rate only goes down 1 to 1.5 percentage points a year,” said Goolsbee, the Robert P. Gwinn Professor of Economics.

“Hopefully there is the possibility of a rapid recovery—maybe a reverse check mark where you went down, and then you came back at least part of the way at kind of a rapid pace. We absolutely have to do everything we can to go in that direction because the alternative is much more grim.”

Should the government bail out everyone?

Some sectors, such as manufacturing, can likely come back quickly, said Rajan, who previously served as the governor of the Reserve Bank of India and the chief economist and director of research at the International Monetary Fund. Others, however, will take much longer to fully recover—if they ever do at all. Those differences need to be taken into account when considering government interventions.

“One of the decisions we have to make soon is how the government spends that money,” said Rajan, the Katherine Dusak Miller Distinguished Service Professor of Finance. “It’s going to be expensive to keep the hospitality industry alive for a year or more until people feel comfortable going out again.”

Which sectors might expand or contract?

Kroszner said that an effective recovery strategy should consider which types of jobs will be available in the coming years and how to ensure that employees have the skills to fill them.

“Well-intentioned programs that are trying to freeze things as they were in February are going to make it more difficult for people to find new positions,” Kroszner said. “At some point we're going to have to allow for a transition. We've got to get the support structures right to get people moving into new sectors.”

Restarting regular economic activity

Goolsbee said that the shortest path to recovery is by spending on health care and testing.

“The most important thing you can do for the economy is slow the spread of the virus,” he said. “That’s how you stimulate the economy, because people have to feel safe leaving their homes. We’ve now got six countries that have gotten out of lockdown and are going back to normal. Each of them has done extensive testing to get the rate of the spread of the virus low enough that it peters itself out.”

Paying off debt

Goolsbee said there’s no alternative to adding to the debt, but we should be considering the long-term implications for paying off these debts.

“Nobody in June of 1944 questioned how to pay for D-Day and keep it revenue neutral,” he said. “If you look post-World War II, we went through a period of heavy taxation to pay back the debts that we accumulated. It's what we should have done, and spreading that over time is better than trying to pay for it all at once. The same is true here.”

Rajan added that these burdens could also affect future investment.

“This was the debt overhang problem that many emerging markets had,” Rajan said. “We should be wary when we have lots of debt and potential taxation down the line. A lot of investors are going to be worrying about where it's going to fall, and that could be perhaps very damaging for investment and growth.”

—This story was first published by  Chicago Booth . Register  here   to attend the next event in the virtual Economic Outlook series on May 13, featuring Profs. Veronica Guerrieri, Randall S. Kroszner and Brent Neiman.

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The Economic Impact of COVID-19 around the World

This article provides an account of the worldwide economic impact of the COVID-19 shock. In 2020, it severely impacted output growth and employment, particularly in middle-income countries. Governments responded primarily by increasing expenditure, supported by an expansion of the supply of money and debt. These policies did not put upward pressure on prices until 2021. International trade was severely disrupted across all regions in 2020 but subsequently recovered. For 2021, we find that the adverse effects of the COVID-19 shock on output and prices were significant and persistent, especially in emerging and developing countries.

Fernando Martin is an assistant vice president and economist, Juan M. Sánchez is a vice president and economist, and Olivia Wilkinson is a senior research associate at the Federal Reserve Bank of St. Louis.


For over two years, the world has been battling the health and economic consequences of the COVID-19 pandemic. As of the writing of this article, deaths attributed to COVID-19 have surpassed six-and-a-half million people.  Global economic growth was severely impacted: World output by the end of 2021 was more than 4 percentage points below its pre-pandemic trend.  International trade was also significantly disrupted at the onset of the pandemic. The pandemic also prompted a strong policy response, resulting in a rise of government deficits and debt as well as widespread increases in the money supply. Finally, after an initial decline, prices have soared, resulting in elevated inflation rates.

This article provides an account of the worldwide economic impact of the COVID-19 shock. This shock was not felt simultaneously around the world, and mitigation policies, both health related and economic, varied substantially across countries. Yet there are some significant similarities in outcomes, especially when considering the pandemic period as a whole. Our analysis focuses on the shock's effects on specific groups of countries, related by their level of development and geographical location.

We find that the COVID-19 shock severely impacted output growth and employment in 2020, particularly in middle-income countries. The government response, mainly consisting of increased expenditure, implied a rise in debt levels. Advanced countries, having easier access to credit markets, experienced the highest increase in indebtedness. All regions also relied on monetary policy to support the fiscal expansion, and hence the money supply increased everywhere. The specific circumstances surrounding the shock implied that the expansionary fiscal and monetary policies did not put upward pressure on prices until 2021. International trade was severely disrupted across all regions in 2020 but subsequently recovered. When extending the analysis to 2021, we find that the adverse effects of the shock on output and prices have been significant and persistent, especially in emerging and developing countries.

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The Global Economy: on Track for Strong but Uneven Growth as COVID-19 Still Weighs

Global Economic Prospects - June 2021

A year and a half since the onset of the COVID-19 pandemic, the global economy is poised to stage its most robust post-recession recovery in 80 years in 2021. But the rebound is expected to be uneven across countries, as major economies look set to register strong growth even as many developing economies lag.

Global growth is expected to accelerate to 5.6% this year, largely on the strength in major economies such as the United States and China. And while growth for almost every region of the world has been revised upward for 2021, many continue to grapple with COVID-19 and what is likely to be its long shadow. Despite this year’s pickup, the level of global GDP in 2021 is expected to be 3.2% below pre-pandemic projections, and per capita GDP among many emerging market and developing economies is anticipated to remain below pre-COVID-19 peaks for an extended period. As the pandemic continues to flare, it will shape the path of global economic activity.

The United States and China are each expected to contribute about one quarter of global growth in 2021. The U.S. economy has been bolstered by massive fiscal support, vaccination is expected to become widespread by mid-2021, and growth is expected to reach 6.8% this year, the fastest pace since 1984. China’s economy – which did not contract last year – is expected to grow a solid 8.5% and moderate as the country’s focus shifts to reducing financial stability risks.

Lasting Legacies

Growth among emerging market and developing economies is expected to accelerate to 6% this year, helped by increased external demand and higher commodity prices. However, the recovery of many countries is constrained by resurgences of COVID-19, uneven vaccination, and a partial withdrawal of government economic support measures. Excluding China, growth is anticipated to unfold at a more modest 4.4% pace. In the longer term, the outlook for emerging market and developing economies will likely be dampened by the lasting legacies of the pandemic – erosion of skills from lost work and schooling; a sharp drop in investment; higher debt burdens; and greater financial vulnerabilities. Growth among this group of economies is forecast to moderate to 4.7% in 2022 as governments gradually withdraw policy support.

Among low-income economies, where vaccination has lagged, growth has been revised lower to 2.9%. Setting aside the contraction last year, this would be the slowest pace of expansion in two decades. The group’s output level in 2022 is projected to be 4.9% lower than pre-pandemic projections. Fragile and conflict-affected low-income economies have been the hardest hit by the pandemic, and per capita income gains have been set back by at least a decade.  

Regionally, the recovery is expected to be strongest in East Asia and the Pacific, largely due to the strength of China’s recovery. In South Asia, recovery has been hampered by serious renewed outbreaks of the virus in India and Nepal. The Middle East and North Africa and Latin America and the Caribbean are expected to post growth too shallow to offset the contraction of 2020. Sub-Saharan Africa’s recovery, while helped by spillovers from the global recovery, is expected to remain fragile given the slow pace of vaccination and delays to major investments in infrastructure and the extractives sector.  

Uncertain Outlook

The June forecast assumes that advanced economies will achieve widespread vaccination of their populations and effectively contain the pandemic by the end of the year. Major emerging market and developing economies are anticipated to substantially reduce new cases. However, the outlook is subject to considerable uncertainty. A more persistent pandemic, a wave of corporate bankruptcies, financial stress, or even social unrest could derail the recovery. At the same time, more rapid success in stamping out COVID-19 and greater spillovers from advanced economy growth could generate more vigorous global growth.

Even so, the pandemic is expected to have caused serious setbacks to development gains. Although per capita income growth is projected to be 4.9% among emerging market and developing economies this year, it is forecast to be essentially flat in low-income countries. Per capita income lost in 2020 will not be fully recouped by 2022 in about two-thirds of emerging market and developing economies, including three-quarters of fragile and conflict-affected low-income countries. By the end of this year, about 100 million people are expected to have fallen back into extreme poverty. These adverse impacts have been felt hardest by the most vulnerable groups – women, children, and unskilled and informal workers.

Global inflation, which has increased along with the economic recovery, is anticipated to continue to rise over the rest of the year; however, it is expected to remain within the target range for most countries. In those emerging market and developing economies in which inflation rises above target, this trend may not warrant a monetary policy response provided it is temporary and inflation expectations remain well-anchored.

Climbing Food Costs

Rising food prices and accelerating aggregate inflation may compound rising food insecurity in low-income countries. Policymakers should ensure that rising inflation rates do not lead to a de-anchoring of inflation expectations and resist using subsidies or price controls to reduce the burden of rising food prices, as these risk adding to high debt and creating further upward pressure on global agricultural prices.

A recovery in global trade after the recession last year offers an opportunity for emerging market and developing economies to bolster economic growth. Trade costs are on average one-half higher among emerging market and developing economies than advanced economies and lowering them could boost trade and stimulate investment and growth.

With relief from the pandemic tantalizingly close in many places but far from reach in others, policy actions will be critical. Securing equitable vaccine distribution will be essential to ending the pandemic. Far-reaching debt relief will be important to many low-income countries. Policymakers will need to nurture the economic recovery with fiscal and monetary measures while keeping a close eye on safeguarding financial stability. Policies should take the long view, reinvigorating human capital, expanding access to digital connectivity, and investing in green infrastructure to bolster growth along a green, resilient, and inclusive path.  

It will take global coordination to end the pandemic through widespread vaccination and careful macroeconomic stewardship to avoid crises until we get there.  

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Building back better: A sustainable, resilient recovery after COVID-19

For the economic recovery from the COVID-19 crisis to be durable and resilient, a return to ‘business as usual’ and environmentally destructive investment patterns and activities must be avoided. Unchecked, global environmental emergencies such as climate change and biodiversity loss could cause social and economic damages far larger than those caused by COVID-19. To avoid this, economic recovery packages should be designed to “build back better”. This means doing more than getting economies and livelihoods quickly back on their feet. Recovery policies also need to trigger investment and behavioural changes that will reduce the likelihood of future shocks and increase society’s resilience to them when they do occur. Central to this approach is a focus on well-being and inclusiveness. Other key dimensions for assessing whether recovery packages can “build back better” include alignment with long-term emission reduction goals, factoring in resilience to climate impacts, slowing biodiversity loss and increasing circularity of supply chains. In practice, well-designed recovery policies can cover several of these dimensions at once, such as catalysing the shift towards accessibility-based mobility systems, and investing in low-carbon and decentralised electricity systems.

1. Governments’ first priorities in tackling the COVID-19 pandemic have been to overcome the health emergency and to implement rapid economic rescue measures, the latter mostly aimed at providing essential liquidity and protecting livelihoods in the face of abrupt losses of income. As the health crisis gradually abates in some countries, attention is now turning to preparing stimulus measures for triggering economic recovery. This policy brief examines how these stimulus packages can create a recovery that “builds back better”, i.e. not only getting economies and livelihoods back on their feet quickly, but also safeguarding prosperity for the longer term. This means triggering investments and societal changes that will both reduce the likelihood of future shocks and improve our resilience to those shocks when they do occur, whether from disease or environmental degradation. At the heart of this approach is the transition to more inclusive, more resilient societies with net-zero GHG emissions and much reduced impacts on nature. Other OECD policy briefs examine the role of environmental health in strengthening resilience to pandemics (OECD, 2020[1]) and COVID-19 and the low-carbon transition (OECD, forthcoming).

  A more resilient economy depends on a shift to sustainable practices

2. In addition to the immediate human suffering caused by the disease itself and the loss of livelihoods for millions, the COVID-19 pandemic has also highlighted several key vulnerabilities of our societies and economic system . Global interconnectedness has helped to create huge economic and social benefits for decades, albeit unequally, but also facilitated the rapid spread of the pandemic. More broadly, the speed and depth of the economic crisis have shown that a core principle of the global economy – prioritising short-term economic growth and efficiency over long-term resilience – can have huge societal costs. The precariousness of long and complex global value chains has been revealed, with many countries struggling to acquire medical and other strategic supplies. Social inequalities have been exposed and rapidly exacerbated by the massive but uneven loss of employment, with the equivalent of more than 300 million jobs potentially at risk (ILO, 2020[2]) . Although this is not the first economic crisis to expose these frailties, the depth and breadth of the current circumstances have brought the issue of resilience and preparedness high in the public consciousness.

3. The exposed vulnerabilities are particularly sobering when seen in the light of an even bigger future threat to the global economy: environmental degradation driven by our current economic system. The world’s environmental emergencies are as pressing as ever, even if they may seem distant during such a very human crisis. The impacts of climate change, air pollution, biodiversity loss and poor ocean health already cause immense suffering globally and harbour further systemic vulnerabilities for the global economy that could ultimately eclipse the current crisis. Physical and economic impacts from climate change are already being felt, and some regions have experienced extreme weather events at the same time as tackling COVID-19, such as super-cyclone Amphan in Bangladesh and Typhoon Vongfong in the Philippines (UN, 2020[3]) . Without structural changes to our economies, continued accumulation of greenhouse gases (GHGs) in the atmosphere will lead to potentially catastrophic further impacts. While the economic shut-down has led to some widely-reported environmental improvements, such as reduced emissions of GHGs and air pollutants and less water pollution, these in themselves will have almost no long-term impact (Le Quéré et al., 2020[4]) . If economic activity resumes as before, they are likely to be temporary and quickly erased. Indeed, GHG emissions rebounded and resumed growth in the aftermath of the recent economic crises (OECD, 2020 forthcoming).

4. These interlinked environmental crises may also heighten the likelihood and likely impact of future infectious diseases. The economic pressures driving biodiversity loss and the destruction of ocean health can have cascading impacts on societies, and may increase the risk of future zoonotic viruses (those which jump from animals to humans) due to the expansion of human activities leading to deforestation, combined with the increased demand for and trafficking of wildlife (Jones et al., 2013[5]) . Declines in local environmental quality, including air and water pollution, can influence the vulnerability of societies both to disease and to the effects of a less stable climate, with impacts likely to affect poorer communities more (OECD, 2020[1]) .

5. Returning to “business as usual” will not deliver a sustained long-term economic recovery that also improves well-being and reduces inequality. With massive stimulus packages starting to be unveiled around the world, governments, businesses and societies as a whole have both a responsibility and self-interest to not only look for near-term measures to shore-up livelihoods and employment, but also to take a step back and reflect on the political and economic driving forces leading to the current crisis.

6. Despite encouraging signs from governments, businesses and citizens, recovery plans have so far mostly fallen short. Many governments have recognised the need and opportunity of a sustainable recovery. For example, in April 2020, the G20 Finance Ministers agreed to “commit to support an environmentally sustainable and inclusive recovery” (G20, 2020[6]) . Encouragingly, an international poll covering developed and developing countries also suggests that a majority of citizens see a focus on environmental issues as a continued priority as we emerge from the COVID-19 crisis (IPSOS MORI, 2020[7]) . The fragilities exposed by the pandemic may act to underline the reasons that environmental issues were becoming top political priorities around the world before COVID-19 struck. In 2019, millions of people, spearheaded by youth, protested in the streets for climate action, leading to several governments officially declaring a “climate emergency”. Biodiversity loss and the ongoing mass species extinction were also gaining headlines around the world, and the visible crisis engulfing the world’s oceans had become a front-line political issue in several countries. As recently as January 2020, climate change and biodiversity loss topped the World Economic Forum’s list of global risks (World Economic Forum, 2020[8]) . The social and economic case for a sustainable, resilient recovery is very clear. Despite this, economic recovery measures proposed so far have mostly scored poorly on environmental metrics, with unsustainable support outstripping sustainable measures in many countries (Vivid Economics, 2020[9]) . While there is significant support for “green” technologies and industries, in particular in European countries, in many cases this is outweighed by ongoing support for “brown” activities that may lock-in emissions intensive pathways.

  “Building Back Better”: key dimensions for a resilient economic recovery

7. The term “Building Back Better” has been increasingly and widely used in the context of the economic recovery from COVID-19 (WRI, 2020[10]) (We Mean Business Coalition, 2020[11]) . The notion originated in the context of recovery and reconstruction from physical disasters 1 , with an emphasis on making preventative investments that improve resilience to, and so reduce the costs of, future disasters. The challenge of re-igniting the global economy in the aftermath of the economic crisis triggered by COVID-19 is of course different. There has been no physical disaster, and the focus is global. Yet the economic crisis is so severe, the risks from returning to previous patterns so high, and the opportunity to embrace a more sustainable recovery so clear, that the term is relevant in this context. Even at the global level, there is still an emphasis on prevention, as the investments and behavioural changes made will pay dividends in the future through reduced exposure and increased resilience to costly future disruptions – whether due to climate change, disease, or a confluence of these or other factors.

8. To “build back better”, recovery measures can be assessed across a number of key dimensions (Figure 1). Common to all these dimensions is the need for urgent decisions taken today to incorporate a longer-term perspective. For example, assessing measures against these dimensions can expose where competing potential targets for stimulus spending may offer similar near-term benefits in terms of job creation, but very different long-term outcomes for sustainability and resilience (for example, whether or not the stimulus leads to investment in long-lived high-emitting infrastructure that may lock-in GHG emissions far into the future).

essay on economy after covid 19

9. A central dimension of building back better is the need for a people-centred recovery that focuses on well-being, improves inclusiveness and reduces inequality. To improve public support, recovery policies need to be measured on more than just economic growth and total job creation. Emphasising other elements that improve well-being, such as income, job quality, housing and health is important to achieve this (OECD, 2020[12]) . More specifically, where stimulus packages target environmental objectives, a focus on people’s well-being is also crucial to cement the social and political acceptance of environmental measures (OECD, 2019[13]) . Even before the crisis, the impact of environmental policies on inequalities among and within countries, and between genders, was a mounting key concern in several regions, and this is even more critical in the current context. Means for ensuring that environmental measures are socially inclusive include making taxes and subsidies progressive (supporting the most vulnerable) and preparing the workforce for the green transition, for example by adapting and adopting “Just Transition” principles refocused for an era of economic crisis and recovery (OECD, 2017[14]) .

10. The relative importance of the other dimensions will likely vary across different country contexts, according to their development priorities, infrastructure needs and social circumstances, in particular for developing countries. These dimensions include:

Aligning recovery measures with long-term objectives for reducing GHG emissions. Avoiding the worst impacts of climate change is key to future resilience and stability. A careful assessment of the influence of stimulus packages on future GHG emissions trajectories is crucial, including in the context of moving towards net-zero emissions. This relates both to near-term emissions of economic activities receiving liquidity support, as well as long-term structural implications of potential lock-in through infrastructure investment decisions facilitated by recovery packages. The long-lived nature of infrastructure investments likely to be made through stimulus packages means that decisions made now will have implications for decades to come, and could determine whether the world can achieve its goals of averting the worst impacts of climate change.

Strengthening resilience to the impacts of climate change. Resilience to climate change is one specific aspect of improving the overall resilience of economies and societies. In particular, infrastructure networks will face increasing pressures from the impacts of climate change, but also play an important role in building society’s resilience to those impacts. Infrastructure investment is likely to be a key component of recovery measures in many countries – in part because of job creation potential – and it is important to ensure that infrastructure investments are climate resilient and do not increase exposure and vulnerability. This will reduce direct economic damages from climate related disasters and minimise the indirect costs created by the cascading impacts caused by the disruption of both critical services and economic activities. New infrastructure investments, including in low-carbon developments, need to build in resilience against future climate impacts, by assessing climate risks across the lifetime of the project. Retrofitting existing infrastructure is more costly, both organisationally and in terms of physical investment (OECD, 2018[15]) .

Integrating more ambitious policies to halt and reverse biodiversity loss and restore ecosystem services, including through nature-based solutions. Biodiversity and ecosystem services are fundamental to economic activities and human health; deforestation and other land use change have been linked to the spread of diseases. Investment in natural infrastructure such as reforestation and wetland and mangrove restoration are not only a cost effective and sustainable way to improving resilience to climate impacts, but offer employment opportunities similar to man-made infrastructure investments. Investments targeted through stimulus packages need to better assess and value biodiversity and ecosystem services, and integrate these values into decision-making. In addition, government support that is potentially harmful to biodiversity must be identified and reformed. Additionally, valuing natural capital is integral to improving a range of environmental health dimensions that are important for societal resilience to pandemics and other shocks (such as cleaner air and water (these issues are covered in detail in another policy brief (OECD, 2020[1]) )

Fostering innovation that builds on enduring behaviour changes . Continued technological and process innovation will be critical to achieving climate and other sustainability goals. Governments play a key role in fostering an innovation ecosystem, well beyond funding basic research and development (OECD/The World Bank/UN Environment, 2018[16]) . However, the COVID-19 pandemic will affect cultural norms and behaviour in ways that are not yet known. To be effective at creating jobs and improving resilience, stimulus packages need to take into account potential behaviour changes that could affect the saliency of different policy measures, including for innovation. For example, tackling reluctance to take public transport by encouraging measures to reduce crowding, improve hygiene and to encourage “active” transport modes; introducing measures that better support remote working (including well-being aspects) in order to reduce demand for transport such as encouraging remote working and events.

Improving resilience of supply chains, including through increased adherence to circular economy principles: the COVID-19 pandemic and containment measures have raised new questions about the systemic resilience of complex global production methods and value chains, triggering renewed interest in more diversified and more localised production and shorter supply chains in certain sectors. The environmental implications of such a shift are far from clear, but there is a role for policy, including through stimulus packages to ensure that local supply chains do genuinely improve resilience and reduce environmental impacts, including by improving resource efficiency and increasing circularity of supply chains.

11. Fortunately, designing stimulus measures in this way does not mean starting with a blank slate. International agreements already exist across many of these dimensions, such as the Paris Agreement on climate change, the Aichi Biodiversity Targets, and the Sendai Framework for disaster risk reduction. The UN Sustainable Development Goals also provide an overarching compass for ensuring that social development and well-being is fully integrated with environmental objectives. In terms of policy measures, many of the needed actions to build back better and improve resilience through stimulus packages can build on existing knowledge of policy design implementation. For example, although GHG emissions were growing until 2019, the experience from more than two decades of designing and implementing climate responses and assessing their effectiveness remains relevant. Similar policy knowledge exists for halting and reversing biodiversity loss, and improving circularity of material use, among others. Additionally, there are some key lessons from environmental measures integrated into stimulus measures following the global financial crisis in 2008-09 (Agrawala, Dussaux and Monti, 2020[17]) . 2

  “Building Back Better” in practice

12. This section provides some key examples of opportunities for “building back better” across sectors, highlighting where public stimulus spending could be oriented to align across several of the above dimensions simultaneously. These examples are clearly not exhaustive, but are highlighted here because of their relevance for where stimulus investments can catalyse important systemic change in economic sectors while also meeting the urgent need for creating employment, or otherwise trigger changes necessary to support longer-term resilience outcomes. While these examples cover a wide range of specific policy areas, some overarching policy guidance is provided in Box 1.

  Enhancing biodiversity while ensuring a resilient supply of food

13. Biodiversity and natural infrastructure such as forest, wetland and mangrove ecosystems, are essential inputs for many economic activities, and are central to hundreds of millions of livelihoods. Natural ecosystems are also essential pillars of resilience. Yet most of this natural capital is undervalued in the economy, or valued only as a harvestable commodity and not for the vital ecosystem services provided. The unpriced natural capital consumed by primary production (agriculture, forestry, fisheries and mining) and some primary processing sectors (including cement, steel, pulp and paper) was valued at USD 7.3 trillion in 2013 (Natural Capital Coalition, 2016[18]) . However, despite the introduction of some policies to value biodiversity, in particular through payments for ecosystem services, most existing approaches to measure and value natural capital loss remain limited (OECD, 2019[19]) . Through recovery packages, governments may have leverage to increase private finance for nature-based solutions and to enlarge the commitment of businesses and investors to measure biodiversity impacts, dependencies, risks and opportunities, e.g. through conditions for financial support in recovery packages to agriculture and other sectors with close links to biodiversity (OECD, 2019[19]) .

While the multiple dimensions of “building back better” span many specific policy areas, some key recommendations for governments to consider are:

Screen all elements of stimulus packages for their longer terms implications across the key dimensions outlined above, prioritising actions that:

Combine benefits for jobs and reducing inequality with implications for longer-term resilience, including by avoiding locking-in emissions intensive infrastructure and systems.

Can be implemented quickly, including “shovel-ready” targets for public investment and existing policy frameworks that can be rapidly scaled up

Favour cross-sectoral, cross-government approaches that take a long-term, systemic view rather than single technological outcomes

Build pipelines of “shovel-ready” sustainable infrastructure projects: take co-ordinated cross-ministry action to build pipelines of sustainable projects that can be implemented quickly, while avoiding favouring established emissions-intensive activities just because they are fast

Maintain (and increase) ambition of long-term environmental objectives (including net-zero GHG emissions) and ensure that policies and investments triggered through stimulus packages are aligned with those outcomes , for example:

Avoid relaxing existing environmental regulations to provide near-term relief, as the costs of longer-term vulnerability will often outweigh short-term economic relief

Make subsidies and other government support for specific industries conditional on both environmental improvements (including GHG emissions) and better overall resilience (including for the workforce)

Make energy pricing coherent as part of fiscal reorganisation post-crisis, including phasing out fossil-fuel subsidies and building carbon pricing that includes social protections (e.g. using carbon pricing revenue to mitigate distributional implications for households, as well as to finance support for structural adjustment of workers and communities).

Actively support development of green finance flows to improve resilience, encouraging longer-term horizon for financial decisions :

Measure the consistency of investments and financing with climate change mitigation and resilience, building on existing private and public sector initiatives (Jachnik, Mirabile and Dobrinevski, 2019[20])

Promote robust and transparent definitions and standards for green finance in order to guide financial allocations and investment (including taxonomy approaches);

Increase potential for public finance to catalyse private investment by further empowering public finance institutions: e.g. by increasing lending authority and ability to co-invest.

Increase and improve capacities to assess, manage and publicly disclose climate change-related financial risks, building on existing frameworks and approaches (e.g. TCFD, NGFS).

Design public procurement processes that value both resilience and low-carbon as well as promoting innovation : for example ranking bids based costs over the asset lifetime under different climate impact scenarios, and accounting for life-cycle GHG emissions.

Provide specific support for reskilling and training for industries affected by the immediate crisis and longer-term decarbonisation, along with supportive policies such as reforming housing policies to encourage mobility.

14. The food sector is fundamentally important for the conservation and sustainable use of natural capital, and ultimately dependent on it. Secure food supply is essential for well-being and economic stability – indeed even to sustain life – meaning that the availability and affordability of food are likely to be key government priorities coming out of the crisis (OECD, 2020[21]) .

15. The agriculture sector faces growing threats including from climate change and infectious diseases of plants and livestock. It is also a major driver of environmental degradation. Land-use change, including for agriculture, is responsible for a large part of deforestation. Furthermore, excessive fertilizer use has important implications for freshwater and ocean ecosystems due to nutrient run-off. Increased ecosystem pressures due to agriculture could also have implications for potential creation of new human diseases. Agricultural expansion into zones close to wilderness areas increases pressures on biodiversity, and agricultural intensification, for example with denser livestock populations, can increase the chance of zoonotic transfer of viruses across species (Jones et al., 2013[5]) .

16. Agriculture already receives substantial government support globally. In 53 countries analysed by the OECD, farmers received around USD 528 million in support in 2019 (OECD, 2019[22]) . In addition to securing jobs and preventing near-term supply disruption, recovery measures should aim to reshape policies in the sector to promote environmental sustainability and resilience, and innovation for improved productivity. In the context of the COVID crisis, there is potential to focus on reform of the most harmful and distortive measures, including but not limited to the reinforcement of coupled supports (i.e. those proportional to production or livestock), as well as the relaxation of environmental regulation. Such measures could otherwise contribute to locking-in unsustainable practices and delay the transition of food systems towards sustainable practices. Investments and training aimed at triggering farmers’ transition to more sustainable agricultural practices would benefit the environment, climate, as well as farmers’ livelihoods.

17. More generally, patterns of consumer food choices can be important levers for ambitious climate mitigation as well as for improving health and well-being through balanced diets. Where access to sufficient protein is not an issue, policies to promote lower-emission food choices may also help, such as encouraging more plant-based food choices or shifting to sourcing from lower-emission livestock systems. Measures that could contribute to such objectives include public communication campaigns or education. It is also crucial that, governments address the issue of food security for vulnerable populations. Food stamps and increased subsidies may also be an option to help vulnerable populations, as long as physical access to healthy food and diets is ensured.

  Investing for low-carbon, resilient electricity systems

18. Economic stimulus packages can help accelerate the shift towards a zero-carbon, climate-resilient electricity system while creating jobs. While large-scale renewables remain important in this regard, distributed renewables, demand-side energy efficiency and improving the flexibility of the power system are also important opportunities.

19. Energy-related stimulus measures need to consider the changed context of the global energy system, with a historic reduction in energy demand expected in 2020, contributing to extremely low and volatile fossil fuel prices (IEA, 2020[23]) . Enduring low oil and gas prices reduce incentives for energy efficiency and renewables, as well as leading to reduced investment in fossil fuel industries. Energy investment is expected to decline sharply in 2020, even for renewables (IEA, 2020[24]) . In this context, using stimulus spending to invest in and mobilise finance for ‘shovel-ready’ utility-scale renewables (e.g. wind and solar photovoltaic) remain key levers for a sustainable economic recovery. But this is only part of the story. Stimulus packages can additionally seek to drive investment in other measures that accelerate decarbonisation while also improving resilience of the electricity system, both to climate impacts and demand shocks such as that triggered by the current crisis. Examples include energy efficiency, distributed energy resources and improving the flexibility of the power system. In developing countries, measures that increase electricity access, including through off-grid or mini-grid renewable systems, can have many benefits for employment, well-being, health and societal resilience ( (IEA, 2017[25]) .

20. Energy efficiency is a clear candidate for a green recovery package but it is essential to achieve climate goals and is often generally labour-intensive. More than 3.3 million people are employed in energy efficiency in the US and EU alone, most of them in small and medium sized enterprises (IEA, 2020[26]) . Prioritising energy conservation and distributed energy resources also improves the resilience of the power system while delivering on a number of well-being benefits (enhanced affordability, lower environmental footprint, lower investment needs in network infrastructure). Beyond power, an important target for energy efficiency is the building sector (covered below). Energy efficiency across the economy can also mean a switch to electricity for energy uses previously directly using fossil fuels, such as electrification in industry, roll-out of electric vehicles and electric heat pumps as part of building energy efficiency measures (IEA, 2018[27]) . While this electrification trend can have substantial benefits for reduced air pollution at the point of use, the implications for GHG emissions depend on the decarbonisation of the underlying electricity system, as well as its ability to handle the increased demand pattern.

21. Challenges to scaling up energy conservation and distributed energy resources during the recovery include the relatively small scale of these projects and potential liquidity constraints for both households and firms. Governments could leverage on existing programmes, create ‘project pipelines’ of shovel-ready projects, and identify partners (e.g. utilities, municipalities, housing associations) and channels (e.g. energy efficiency obligations, on-bill financing) that help scale up the programmes in the short-term without creating a boom and bust cycle (IEA, 2020[26]) . These measures can be accompanied by investments in training to reduce skill shortages in the power and energy sector, including for energy system engineers and building retrofit specialists.

22. Another important target for stimulus packages is public investment in flexibility of power systems. This can include electricity storage (notably lithium ion batteries, also essential for electric transport), smart grids (e.g. rollout of smart meters) that are crucial for demand response, facilitating the integration of variable renewable energy sources and improving interconnection of grids. The lock-down measures imposed during the COVID-19 crisis have shone a spotlight on the importance of grid system flexibility, because falling demand has raised the share of renewables due to their priority dispatch and low-running costs. Finally, innovation in the energy sector is essential for technologies that will be essential for reaching net-zero emissions over the longer-term, including carbon capture and storage.

  Energy efficient housing as part of compact, resilient and sustainable cities:

23. The confinement of hundreds of millions of people to their homes due to COVID-19 has highlighted major failures in the housing sector and illuminating social inequalities related to the quality and comfort of dwellings and building services such as sanitation. Situations where poor quality housing increases inequality by posing major threats for security and health have become ever more visible, including through indoor air-pollution, as well through increased living costs due to poor energy efficiency.

24. Cities, and the building sector more broadly, are key targets for energy efficiency improvements. Buildings account for nearly 30% of global CO 2 emissions, both through direct burning of fossil fuels for heating and indirectly through their electricity consumption (IEA, 2019[28]) . To achieve the goals of the Paris Agreement, there is a strong need both for retrofit of existing building stock and for new builds to meet stringent energy-efficiency standards. Despite the clear benefits of investing in building efficiency, the barriers are well-known, including the need for upfront capital, behavioural inertia and split incentives between landlords and tenants. In emerging economies, the investment gap for green buildings is estimated at USD 1 trillion annually according to the IFC. While country contexts vary for both types of investments, policy gaps (e.g. the need for building standards and incentives for energy efficiency), and the need for robust and scalable business and financing models, are typically key factors standing in the way of accelerated investment. Stimulus packages could therefore be critical to invest in the massive retrofits needed to reduce GHG emissions from the building stock at the same time as improving living conditions and creating jobs. Measures include direct grants, tax breaks for efficiency investments and potentially scrappage schemes for inefficient household appliances. Good experience with such measures was gained from stimulus measures following the 2008 financial crisis (Agrawala, Dussaux and Monti, 2020[17]) . Policy incentives for residential energy efficiency also present clear opportunities for attracting private sector investment ( (I4CE, 2020[29]) .

25. More broadly, economic recovery measures need to consider better coordination between housing policies and wider urban planning. In many countries urban planning has led to sprawling cities, with structurally higher GHG emissions and air pollution than dense cities, for several reasons including increased reliance on private cars. The COVID-19 pandemic could exacerbate this trend through an increase in demand for less dense neighbourhoods. For example, city dwellers may seek single-family homes in less dense neighbourhoods, due to a perception of higher infection risk in more dense housing. This could run counter to efforts to curb GHG emissions and could create a tension between balancing future resilience with mitigation. Transforming cities into liveable places where people want to live and stay can help offset this trend and contribute to both decarbonisation, resilience and lower inequality. Measures could include integrating programmes to retrofit buildings as part of wider sustainable development plans for neighbourhoods. In addition, creating the conditions for the uptake of eco-districts, both as part of urban revitalization and new developments, can help to make cities attractive places to live, as well as improving resilience to climate change impacts such as more intense heatwaves. Finally, promoting mixed land-uses and enhancing walking and cycling accessibility are key, providing redundancy in transport options that is a pillar of improved resilience, discussed further below.

  Catalysing the shift towards accessibility-based mobility systems

26. For passenger transport, stimulus packages should aim to combine support for a transition to less polluting cars with investments that initiate a shift towards accessibility-based mobility. The automotive sector is a major global employer, accounting for around 14 million jobs globally, and has been severely affected by the COVID-19 crisis (ILO, 2020[30]) . As governments consider longer-term support for ailing car manufacturers, they can ensure that such support is contingent on environmental improvements including accelerating the shift to electric cars as well as more efficient, cleaner ICE vehicles. However, recovery measures should also embrace a shift towards mobility systems designed around accessibility (the ease of reaching jobs, services, leisure activities, etc.), rather than only emphasising an accelerated uptake of private electric vehicles. The latter would lock-in private vehicle ownership and low-occupancy vehicle use. This would limit the overall emissions reduction potential of the transport sector, and also implies a less resilient system due to overreliance on one transport mode. A mobility system based heavily on private vehicles is also badly equipped to achieve other social and economic goals (e.g. reduced inequality, better health and less congestion).

27. Investing in public transport remains essential both for mobility and for jobs: almost as many people work in public transport as in the car industry (13 million) (UITP, 2017[31]) . However, governments need to recognise new challenges for public transport, such as people being reluctant to take mass transit for sanitary reasons (ITF, 2020[32]) . As well as urgent hygiene and social distancing measures, over the longer term financial support and infrastructure spending could be targeted to enhance capacity, reduce crowding and rebuild the appeal of public transport, especially as capacity is likely to be strained while social distancing measures remain in place (Liebreich, 2020[33]) . Already some cities have benefited from traffic drops during the contingency phase to speed up public transport projects, such as the Bus Rapid Transit extension in Reno, and the metro construction in Los Angeles. 3

28. Governments could also envisage cooperation with both public transport providers and businesses in two ways. Firstly, to support the shift towards public transport pricing schemes that make more efficient use of transport capacity (e.g. peak/off-peak pricing) and secondly, to encourage more flexible working schedules and remote working where possible. In parallel, investment in electric vehicle charging infrastructure is a key opportunity for recovery packages, both for private vehicles and electrified public transport such as buses. Charging plans need to take into account the opportunity cost for other modes as well as public space used.

29. As economic activity resumes, there is an opportunity to reallocate road space and encourage active transport, as a means to create jobs, reduce emissions, improve resilience and even boost public health. At least150 cities around the world have already taken emergency action to create temporary cycle lanes and other space for active transport that allows for social distancing rules (ITF, 2020). To make these temporary changes permanent, stimulus measures could support redesigning road space away from cars to more sustainable modes (with a holistic view to enhance accessibility and promote safety) and adequately price it, building on evidence from the air quality and road safety improvements due to COVID-19 lockdown measures. Active transport modes and micro-mobility (e.g. electric scooters, bike sharing schemes) will be key to prevent a big shift from public transport to the car; supporting them with both investment and road reallocation is also important. R&D support could focus therefore in innovations around electric micro-mobility rather than exclusively on electric cars. Reconfiguration of road-space should also consider the need to better accommodate freight movement (particularly of last-mile travel inside dense city areas) and ensure transition to cleaner fleets; especially as urban freight volumes could increase with higher demand of e-commerce post-COVID. Pursuing an accessibility-based model, encouraging active and public transport modes, will also set a better context for advancing and increasing effectiveness of phasing out fossil fuel subsidies (where these are still in place) and implementing ambitious carbon prices (OECD, 2019[13]) .

  Improving resilience of supply chains while accelerating the shift towards circular economy principles

30. The COVID-19 crisis has shone a spotlight on the resilience of global value chains, which have become increasing complex and globalised in recent decades. If firms seek to improve resilience by shortening supply chains or making them more local, it will be important to ensure that such changes do not inadvertently increase emissions or other environmental impacts. Additionally, economic recovery policies may provide an opportunity to improve resource efficiency overall, including through exploiting job creation possibilities related to the circular economy.

31. Producing and shipping raw materials and manufactured goods along global supply chains is a key pillar of global economic activity but also a major source of environmental pollution. Materials management already accounts for nearly two-thirds of global GHG emissions, and is projected to increase by two-thirds by 2060 under current trends (OECD, 2019[34]) . Despite widespread policy efforts to encourage greater recycling and circularity of both production and consumption, the rate of recycled materials globally remains low.

32. The pursuit of efficiency and minimised costs in recent decades has led to highly complex supply chains, often with global reach and concentration in Asia (particularly in the People’s Republic of China). This contributed to emissions reductions in developed countries, as some emissions were effectively “off-shored” to countries higher up the value chains, because emissions are usually measured based on where goods are produced rather than where they are consumed. The resulting complex supply chains may in some cases be more exposed to risk of disruption, in part due to an emphasis on leanness and efficiency at the expense of redundancy and resilience. Another factor is the geographic concentration of upstream actors, meaning for example that disruption of a single supplier can ripple across multiple supply chains. The sheer complexity of supply chains also plays a role, as companies lack awareness of all the suppliers and secondary suppliers in their supply chains, making proper evaluation of risk challenging (Choi, Rogers and Vakil, 2020[35]) . However, if firms seek to improve resilience by shortening supply chains or building in redundancy, it will nevertheless be important to ensure that these changes do not lead to increases in emissions or environmental impacts. For example, within the OECD area there is evidence that off-shoring led to overall reduction in emissions, due to relocation to regions with less GHG-intensive production (Garsous, 2019[36])

33. The recovery measures proposed by governments also present an opportunity to seek greater circularity in supply chains, which can act both to improve resource efficiency and resilience for businesses (by building greater resilience to supplier risks) and society (by reducing environmental risks). In circular value chains, waste is minimised and end-of-life products are recovered for reuse, remanufacture, and recycling. This is achieved through improved product design (e.g., for disassembly, remanufacturing and recycling) and increased efficiency in the use of material resources, which generates a number of benefits. The availability of recycled materials and products for reuse and remanufacture leads to new sources of supply and supports the diversification of supply chains. Circular value chains also help to advance climate mitigation via reduced primary material production and opportunities to shift consumption towards product-service and other circular business models). Governments can catalyse the uptake of circular value chains via green public procurement (e.g., the Netherlands’ Most Economically Advantageous Tender procedure), removing trade barriers on scrap, landfill fees, Extended Producer Responsibility, and capacity building amongst firms (OECD, 2019[37]) ; (Yamaguchi, 2018[38]) .

34. An increased use of digital technologies for supply chain management can also improve resilience and reduce the likelihood of disruptions, by providing data to identify and evaluate a number of resource efficiency risks and opportunities. On one hand, digitalisation lays the foundation for disclosure of climate-related risks by companies for example through the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD). The recovery from COVID-19 opens an opportunity for governments to require both clear actions towards alignment with environmental policy objectives, as well as disclosure of climate-related risks as conditions for financial support through recovery policies. However, this would need to be applied cautiously in order to avoid hindering activity through administrative burdens, so may be best applied to larger firms. On the other hand, automation and digitalisation of industrial processes often enhances the efficiency of production – including by heavy industry – thereby reducing emissions. Governments can catalyse this shift by attaching conditions on stimulus packages to increase the uptake of these technologies, as well as through targeted innovation policies. However, as job creation is often at the heart of stimulus measures, the implications of automation for the work force would need careful consideration and active labour market management.

[17] Agrawala, S., D. Dussaux and N. Monti (2020), “What policies for greening the crisis response and economic recovery?: Lessons learned from past green stimulus measures and implications for the COVID-19 crisis” , OECD Environment Working Papers , No. 164, OECD Publishing, Paris, .

[35] Choi, T., D. Rogers and B. Vakil (2020), Coronavirus Is a Wake-Up Call for Supply Chain Management , (accessed on 4 June 2020).

[6] G20 (2020), Communiqué G20 Finance Ministers and Central Bank Governors Meeting 15 April 2020 [Virtual] .

[36] Garsous, G. (2019), “Trends in policy indicators on trade and environment” , OECD Trade and Environment Working Papers , No. 2019/01, OECD Publishing, Paris, .

[29] I4CE (2020), Investing in climate can help France drive its economic recovery , (accessed on 4 June 2020).

[26] IEA (2020), Energy efficiency and economic stimulus , (accessed on 4 June 2020).

[23] IEA (2020), Global Energy Review 2020 – Analysis - IEA , (accessed on 4 June 2020).

[24] IEA (2020), World Energy Investment 2020 , (accessed on 4 June 2020).

[28] IEA (2019), The Critical Role of Buildings: Perspectives for the Clean Energy Transition , (accessed on 4 June 2020).

[27] IEA (2018), World Energy Outlook 2018 , International Energy Agency, Paris, .

[25] IEA (2017), Energy Access Outlook 2017: From Poverty to Prosperity , International Energy Agency, Paris, .

[30] ILO (2020), COVID-19 and the automotive industry , (accessed on 4 June 2020).

[2] ILO (2020), ILO Monitor: COVID-19 and the world of work. Fourth edition .

[7] IPSOS MORI (2020), How does the world view climate change and Covid-19? , (accessed on 3 June 2020).

[32] ITF (2020), Re-spacing Our Cities For Resilienc , (accessed on 4 June 2020).

[20] Jachnik, R., M. Mirabile and A. Dobrinevski (2019), “Tracking finance flows towards assessing their consistency with climate objectives” , OECD Environment Working Papers , No. 146, OECD Publishing, Paris, .

[5] Jones, B. et al. (2013), “Zoonosis emergence linked to agricultural intensification and environmental change”, Proceedings of the National Academy of Sciences of the United States of America , Vol. 110/21, pp. 8399-8404, 10.1073/pnas.1208059110 .

[4] Le Quéré, C. et al. (2020), “Temporary reduction in daily global CO2 emissions during the COVID-19 forced confinement”, Nature Climate Change , pp. 1-7, 10.1038/s41558-020-0797-x .

[33] Liebreich, M. (2020), Public Transport’s Covid-19 Capacity Crunch, And What To Do About It , (accessed on 4 June 2020).

[18] Natural Capital Coalition (2016), Natural Capital Protocol , (accessed on 4 June 2020).

[21] OECD (2020), “COVID-19 and the food and agriculture sector: Issues and policy responses” , OECD Policy Responses to Coronavirus (COVID-19) , No. 53, OECD Publishing, Paris, .

[1] OECD (2020), Environmental health and strengthening resilience to pandemics - OECD , (accessed on 3 June 2020).

[12] OECD (2020), How’s Life? 2020: Measuring Well-being , OECD Publishing, Paris, .

[13] OECD (2019), Accelerating Climate Action: Refocusing Policies through a Well-being Lens , OECD Publishing, Paris, .

[22] OECD (2019), Agricultural Policy Monitoring and Evaluation 2019 , OECD Publishing, Paris, .

[19] OECD (2019), Biodiversity: Finance and the Economic and Business Case for Action - OECD , (accessed on 4 June 2020).

[37] OECD (2019), Business Models for the Circular Economy: Opportunities and Challenges for Policy , OECD Publishing, Paris, .

[34] OECD (2019), Global Material Resources Outlook to 2060: Economic Drivers and Environmental Consequences , OECD Publishing, Paris, .

[15] OECD (2018), “Climate-resilient infrastructure” , OECD Environment Policy Papers , No. 14, OECD Publishing, Paris, .

[14] OECD (2017), Investing in Climate, Investing in Growth , OECD Publishing, Paris, .

[39] OECD (2014), Boosting Resilience through Innovative Risk Governance , OECD Reviews of Risk Management Policies, OECD Publishing, Paris, .

[16] OECD/The World Bank/UN Environment (2018), Financing Climate Futures: Rethinking Infrastructure , OECD Publishing, Paris, .


[3] UN (2020), Philippines typhoon recovery, complicated by coronavirus concerns | COVID-19 | UN News , (accessed on 3 June 2020).

[40] United Nations Office for Disaster Risk Reduction, U. (2015), Sendai Framework for Disaster Risk Reduction 2015 - 2030 , (accessed on 4 June 2020).

[9] Vivid Economics (2020), Green Stimulus Index .

[11] We Mean Business Coalition (2020), Build Back Better - , (accessed on 4 June 2020).

[8] World Economic Forum (2020), The Global Risks Report 2020 | World Economic Forum , (accessed on 4 June 2020).

[10] WRI (2020), Coronavirus Recovery | Build Back Better , (accessed on 4 June 2020).

[38] Yamaguchi, S. (2018), “International Trade and the Transition to a More Resource Efficient and Circular Economy: A Concept Paper” , OECD Trade and Environment Working Papers , No. 2018/03, OECD Publishing, Paris, .

Andrew PRAG (✉ [email protected] )

Coined in 2006 in the aftermath of the 2004 Asian tsunami, by 2015 the term “Building Back Better” was in widespread use by the Disaster Risk Reduction (DRR) community and was incorporated into the priorities of the Sendai Framework for Disaster Risk Reduction (United Nations Office for Disaster Risk Reduction, 2015[40]) . It generally refers to the recovery, rehabilitation and reconstruction phase after a disaster to increase the resilience of communities through the restoration of physical infrastructure and societal systems. In that context, there is evidence that disasters did pave the way for regulatory and policy changes to enhance resilience and invest in prevention (OECD, 2014[39]) . The emphasis is not only on preventative measures to reduce cost of recover, but also on incorporating social and environmental improvements for increasing well-being of impacted societies.

The stimulus measures enacted following the global financial crisis of 2008-09 included many examples of governments seeking to integrate aspects of sustainability, with varying degrees of success both economically and environmentally (Agrawala, Dussaux and Monti, 2020[17]) . The similarities between COVID-19 and that crisis are however limited. The nature of the economic and social crisis currently engulfing the world is fundamentally different, borne out of a deep and wide drop in demand right across the real economy, rather than emanating from the financial sector. Importantly, the environmental outlook is also different than it was in 2008. More than a decade later, the need to act on climate change and biodiversity is much more urgent and more broadly accepted by the public. In addition ten years of technological development have seen vast cost reductions in key technologies.

In Los Angeles, the COVID-19 crisis has helped L.A. Metro ( the transport authority) to overcome original opposition from residents, as speeding construction during this time will minimise construction impacts for local business when activities are renewed (Bliss, 2020).

Explaining the economic impact of COVID-19: Core industries and the Hispanic workforce

Subscribe to the center for economic security and opportunity newsletter, aaron klein and aaron klein miriam k. carliner chair - economic studies , senior fellow - center on regulation and markets @aarondklein ember smith ember smith former research analyst - center on children and families @ember_smith.

February 5, 2021

  • 31 min read

This report was developed for our partners at Brookings Mountain West; the original version was published on their site on February 4, 2021.

As the United States prepares for a COVID-19 recovery, policymakers need to understand why some cities and communities were more vulnerable to the pandemic’s economic consequences than others. In this paper, we consider the association between a city’s core industry, its economic susceptibility to the pandemic, and the recession’s racially disparate impact across six select metropolitan areas. We find that areas with economies that rely on the movement of people—like Las Vegas with tourism—faced substantially higher unemployment at the end of 2020 than cities with core industries based on the movement of information. Further, we find the hardest-hit areas have larger Hispanic or Latino communities, reflecting the demographic composition of workers in heavily impacted industries and susceptible areas. We conclude by recommending targeted federal policy to address the regions and communities most impacted by the COVID-19 recession.


  • City and metro economies before COVID-19
  • The economic impact of COVID-19

Policy implications

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More so than any prior economic downturn, the COVID-19 recession has crushed certain industries—those that depend on the movement of people—while leaving others relatively unscathed—those that depend on the movement of information. City economies are concentrated in different industries: Las Vegas and Orlando in travel and tourism, Seattle and San Francisco in technology, and Washington D.C. in government. Thus, the COVID-19 recession’s economic geography is uniquely impacted by the pandemic’s effect on a city’s primary industry. Overlaying geography with race reveals another under-appreciated impact of this recession: an increase in the economic hardship faced by Hispanic or Latino communities.

This piece explores the economic implications of the COVID-19 recession using select metropolitan areas (often referred to by the name of the metro’s primary city), identifying problems and offering policy responses. We examine six metropolitan areas: three with heavy concentration in industries negatively impacted by COVID-19 (Las Vegas, Orlando, and Reno) and three with economies heavily concentrated in industries less negatively, or even positively, impacted by COVID-19 (Seattle, San Francisco, and Washington, D.C.). We find that the cities with industries more acutely impacted have a higher concentration of Hispanic or Latino residents.

Core industries in select cities

City and metro economies before Covid-19

Cities and metropolitan areas often specialize in select industries, creating agglomeration economies. Put simply, there is an economic benefit when firms producing similar goods are located near each other. For example, the auto industry is headquartered in Detroit, finance in New York, entertainment in Los Angeles, information technology in Seattle, and so on. The performance of core industries spills over to supporting industries and affects the entire regional economy; restaurants and retail stores do better when the core industry is booming and struggle when it is not. In this section, we discuss the primary industries in each metropolitan area of interest prior to COVID-19.

Before COVID-19, Orlando had the largest tourism industry in the nation, producing $26 billion per year, while Las Vegas came in second at over $19 billion. 1 However, Las Vegas’ total GDP is smaller than Orlando’s, so the impact of tourism is relatively larger—hospitality and leisure employed more than a quarter of Las Vegas workers in 2019. 2 There are a larger share of leisure and hospitality workers in Las Vegas than government workers in D.C. Orlando and Reno have similarly high employment concentrations in hospitality and leisure, although production as a portion of their economy is sizably smaller than in Las Vegas. Figure 2 shows that roughly one in five workers in Orlando (21%) worked directly in hospitality and leisure in 2019, as did 16% (roughly one in seven) of Reno’s workforce. 3 In these cities, many secondary industries—like the professional or business sector—are driven by their primary economic engines.

Select metropolitan area industry employment - portion of total employment

Seattle and San Francisco, on the other hand, specialize in technology, an industry that may have benefitted from COVID-19. Seattle is the well-known birthplace of Microsoft and the home of Amazon. San Francisco is the modern-day home of enormous tech conglomerates like Salesforce and Adobe and features major corporate offices for many of the Silicon Valley giants located nearby. Anchor industries employ different types of workers; employment in Seattle and San Francisco are both over two times (2.36 and 2.14 respectively) more concentrated in their largest occupational group, computer and mathematical occupations, than the national average. 4 Orlando, by contrast, has slightly less than the national rate of employment in computer and mathematical occupations, while that figure plummets in Las Vegas (50%) and Reno (54%). 5  Put another way, San Francisco and Seattle have more than four times as many employees in computers and math than Las Vegas and Reno, proportionate to the total number of workers in each metro.

Moving beyond the technology versus tourism binary, we add the nation’s capital and government hotspot, Washington, D.C., where one in five workers are employed directly by the government. The corresponding army of lawyers is a good indicator of how the primary industry of a city drives secondary workforces; D.C. has almost three times (2.76) as many legal service workers per capita as the national average. With governing also comes a demand for research (military and civilian) and, as a result, D.C. has an even greater share of employees in computer and mathematics than Seattle or San Francisco (2.46 times the national average), approaching five times as many as Las Vegas and Reno, as a proportion of each metro’s workers. 6

The economic impact of Covid-19

COVID-19, which devastated some industries like leisure and hospitality, barely impacted others. Table 1 shows the change in the unemployment rate among our comparison metros; Las Vegas’ unemployment increased by nearly eight percentage points from November 2019 to November 2020—almost five percentage points more than the nation as a whole. Las Vegas and Orlando are among the metros with the current highest unemployment rates in the country; Las Vegas had the fourth highest unemployment rate of all metropolitan areas, over five points higher than the national rate in November 2020. 7 Las Vegas and Orlando also had among the top 10% highest employment declines of all metro areas from November 2019 to November 2020 (the most recent data available at the metro level 8 ). Meanwhile, the technology- and government-based metros tend to have lower unemployment than the national average, even if they started with rates similar to (or even slightly higher than) Orlando.

In this section, we examine the impact of the coronavirus pandemic on the leisure and hospitality sector (the hardest-hit industry and core sector of Las Vegas, Reno, and Orlando), the pandemic’s effect on COVID-19-resilient industries (like technology in Seattle and San Francisco or government in Washington, D.C.), and discuss economic outcomes for the Hispanic or Latino population in each city.

Table 1: Metropolitan area unemployment, November 2019-20

The most covid-19-vulnerable industry: leisure and hospitality.

Cities with core industries that have been negatively impacted by the COVID-19 recession have broader spillover effects (e.g., an unemployed casino worker in Las Vegas is less likely to buy new clothes). In the aggregate, the devastation of a core industry can mean the decline of others nearby, like with manufacturing in the Rust Belt in the second half of the twentieth century. As a result, metropolitan areas concentrated in hard-hit industries are likely to see negative ripple effects throughout their economy (lower tax revenue, less spending, etc.). As we will explore, the metropolitan areas concentrated in industries susceptible to COVID-19 tend to have larger Hispanic or Latino populations as well. Thus, the pandemic’s economic geography magnifies existing disparities, exacerbating the racial wealth gap for Hispanic or Latino families. This is particularly concerning given that the federal government’s initial COVID-19 relief policies failed to appreciate the economic and geographic realities of this recession and were implemented in a way that reduced benefits for many Hispanic or Latino families. 9

Ten months since the initial wave of closures due to COVID-19, leisure and hospitality workers continue to face the highest unemployment rate amidst the pandemic; over 16% of the sector’s labor force is unemployed. 10 While every metropolitan area has hotels, only a few stake their economies on them. Being a destination city for travel includes the economic benefit of both personal tourism and corporate conferences; COVID-19 devastated both as people stopped travelling altogether. The $100 billion a year U.S. conference industry, which fills hotels during the week for conferences in cities that become hotspots for vacationers on the weekends, is at a near standstill. 11 In November 2019, 88% of Las Vegas’s hotel or motel rooms were occupied; in November 2020, that figure was just 47%. 12 Similarly, 59% fewer passengers passed through Las Vegas’ McCarran International Airport in November 2020 than a year earlier, and 52% fewer tourists visited the city. Orlando is suffering a similar fate; 44% fewer flights were serviced at Orlando’s airport in October 2020 compared to a year before. 13

Hospitality, unemployment, and the Hispanic or Latino Population by Metropolitan Area

We see the spillover effect in force; cities that depend on hospitality and leisure also had higher overall unemployment, suggesting that the performance of the core industry impacted the performance of a metro area’s overall economy. Las Vegas, for example, has the second highest concentration of jobs in hospitality and faced the second largest increase in unemployment (behind Atlantic City). Orlando also stands out with a particularly large hospitality workforce and substantial increase in overall unemployment; both rank among the top 50 metros in November 2020 unemployment. Seattle and Washington D.C., by contrast, are below average in both concentration in hospitality and leisure and change in unemployment, demonstrating again how COVID-19-resilient industry concentrations have helped temper overall job loss.

Figure 3 also overlays the size of a metro’s Hispanic or Latino population: the bigger the circle, the larger the Hispanic or Latino share of the metro’s population. Tourism-dependent cities like Las Vegas and Orlando also tend to have larger Hispanic or Latino populations, while cities with below-average changes in unemployment like Seattle and Washington D.C. tend to have smaller Hispanic or Latino populations.

The decline in travel and hospitality employment was similar across the cities we analyze. The leisure and hospitality industry in Las Vegas suffered a 21.4 percentage point decline in employment since November 2019, but the leisure and hospitality industry in Orlando, D.C., San Francisco, and Seattle all declined by 30 percent or more. 15 Reno is the only city in our sample that faced a smaller unemployment decline in the sector (16%) than Las Vegas (21%). 16 In other words, there was nothing unique about working in the hospitality industry in Las Vegas, Orlando, or Reno as compared to Seattle, San Francisco, or Washington, D.C. except the portion of employment in the sector. If anything, employment held up better in cities’ core industries. However, the employment effects in non-core industries seemed to have been compounded or mitigated by core industry performance. Over a quarter of Las Vegas workers are in the hard-hit leisure and hospitality industry, and the metro’s information, financial activities, and professional business service industries also fared the worst of our comparison metros. Unsurprisingly, Las Vegas’ overall unemployment is also the highest among this group. By contrast, almost a quarter of Washington, D.C.’s employment is in government, a sector that performed better in November 2020 in the metro than in 2019; D.C. also faced the second smallest increase in unemployment among our comparison metropolitan areas.

COVID-19-Resilient Industries: Information and Government

While COVID-19 wreaked havoc on industries that depend on in-person contact, distancing restrictions caused a sharp increase in the usage of technology for remote work and business transactions. Businesses of all types invested more in technology, with one survey by McKinsey finding that, “about the impact of the crisis on a range of measures, [executives] say that funding for digital initiatives has increased more than anything else—more than increases in costs, the number of people in technology roles, and the number of customers.” 17 That survey also found a sharp increase in the share of North American consumers who interact digitally, rising by over 58% as a result of the crisis.

Relative to other industries, information technology and government have done well. Between February and April 2020, sales for non-store retailers (i.e., online shopping) increased by 15%—Amazon added 400,000 jobs this year, nearly doubling its workforce in response to the pandemic. 18 While these jobs are spread throughout the nation, Amazon’s corporate headquarter(s) will likely see disproportionate economic gain from the company’s growth. Facebook also announced plans to hire 10,000 additional workers in April 2020. 19 Meanwhile, the 12-month change in information and government industry unemployment is less than half that of leisure and hospitality. 20

As Table 2 indicates, job losses in information and technology were generally in-line with or slightly below total job loss rates for technology hub cities like Seattle and San Francisco, as well as for D.C., Orlando, and Reno. Interestingly, only in Las Vegas and D.C. were the proportion of job losses greater in information than overall job losses. This could be the result of classification, where information industry jobs that are part of hospitality and leisure or government are classified differently, although one might expect similar impacts in Orlando and Reno.

Table 2: 12-month percent change in employment by industry, November 2019-20

Acceleration of long-run trends towards increased technology use benefits technology firms and, consequently, the communities where technology firms are located. When Amazon and Facebook grow in both employment and value (see Amazon, Facebook stock prices), wealth is disproportionately created in their headquarter cities. As the growth of the auto industry powered Detroit’s rise in the 20th century, growth in technology is powering Seattle and San Francisco’s rise in the 21 st century. COVID-19, while a net loser for all of society, is a relative winner for technology firms and correspondingly, on a relative basis, for their main cities.

Likewise, COVID-19 has put the federal government to the test and Washington responded with money and new jobs. The federal government grew by over 50,000 jobs from the end of 2019 to the end of 2020 and the D.C. metro’s government employment grew by over two percent, one of the few positive figures in Table 2. 21 The old Washington adage that “the most secure job is a federal government job” held and, during the COVID-19 pandemic, secure employment is incredibly valuable. One caveat to our analysis is that while federal government hiring has remained strong, state and local government has not. State and local governments across the country lost over 1.1 million jobs during over the same period, more than offsetting the federal employment boost. 22  Thus, state capitals may not be experiencing similar government booms to Washington D.C.

Perhaps over the long run, structural changes allowing for increased remote work started by the response to COVID-19 will weaken the link between cities and their major industry. If so, this will likely be stronger in the IT sector, where a greater share of remote work is possible than in service sectors such as hospitality, leisure, and gaming. Put simply, the amenities that Las Vegas and Orlando offer cannot be as easily substituted by people sitting behind a computer a thousand miles away as may be the case for technology or government jobs.

The Impact on Hispanic or Latino Workers

Hispanic or Latino workers are particularly negatively impacted by the COVID-19 recession, as has been found in prior studies. In December 2020, the Hispanic or Latino unemployment rate was 9.3%, over three points higher than the white unemployment rate. 23  When COVID-19 initially struck, the Hispanic or Latino unemployment rate skyrocketed, surpassing the Black unemployment rate. By the end of 2020, the gap between Hispanic or Latino and white workers was still larger than when COVID-19 unemployment first struck around March.

Our metro-level analysis confirms the race gap in unemployment; metropolitan areas with above-average unemployment at the end of 2020 are 31% Hispanic or Latino, compared to 10.9% Hispanic or Latino in metro areas with below-average unemployment. Thus, the geographic spillovers in industry performance likely drive the increase in the racial disparity between the Hispanic or Latino and white unemployment rates.

Compounding the geographic effects are industrial concentration differences between racial or ethnic groups. Prior to COVID-19, nearly a quarter of the hospitality sector’s labor force was Hispanic or Latino. COVID-19 has decimated tourism, driving the hospitality and leisure industry to the highest unemployment rate among major industries. 24 Figure 5 shows select industries’ change in employment from November 2019 to November 2020 and the portion of Hispanic or Latino workers in each industry in 2019.

Unemployment change and share of workers who are Hispanic or Latino, select industries

With unemployment also comes a number of other issues; employees often receive health benefits from their employer and losing a job may mean losing affordable health care. These impacts compound existing racial inequity in health care access as the Hispanic or Latino population is also disproportionately likely to contract COVID-19. Las Vegas coronavirus rates per 1,000 residents are much higher among Hispanic or Latino people than white people. This helps explain why data through mid-January 2021 indicate that one out of twelve Hispanic or Latino Las Vegans have had COVID-19, while only one in twenty white residents have. 25 On an age-adjusted basis, death rates for Hispanic residents in Nevada are nearly three times as great as that of white residents. 26

Federal aid has so far been suboptimal in allocating economic assistance to those who need it the most. Over half of coronavirus aid went directly to businesses, many of which were not compelled to keep their employees or prove that they were negatively impacted by the pandemic. 27 By contrast, only about a fifth went directly to workers and families, and the aid that did was not always well-targeted. For example, initial direct payments (stimulus checks) excluded children if they had one parent who was an undocumented immigrant. 28  Direct stimulus payments were also administered slowly, with millions of American families waiting months to receive their funds.

For the purpose of this analysis, the most well-targeted program was supplemental unemployment insurance. By tracking unemployment and incorporating a broader definition of unemployed workers, enhanced unemployment benefits should have flown disproportionately to those in more impacted industries such as leisure and hospitality. As a result, enhanced benefits did more to support the economies of Las Vegas and Orlando than their relative impact in San Francisco, Seattle, and Washington, D.C. Likewise, we would expect Hispanic or Latino workers to make up a disproportionate number of claims given that they faced disproportionately high unemployment. Herein lies one serious potential problem. Many states continue to struggle with significant difficulty in administering the new unemployment insurance aid.

Multiple factors are at play, including specific states’ difficulty modernizing their systems to accommodate the new federal rules and the sudden spike in demand. Florida, for example, had an archaic system that made it difficult for newly eligible workers to qualify. 29 Nevada’s difficulty in expanding eligibility and processing record levels of unemployment claims were also well-documented, leading to a class-action lawsuit against the state’s employment department. 30 Delays in processing claims and providing payments are particularly harmful for people with little savings and difficulty accessing short-term credit at a reasonable cost, burdens that apply disproportionately to Hispanic or Latino Nevadans. This could be one reason why enhanced unemployment insurance benefits were not equitably taken up by those who need it; about the same proportion of workers who filed for unemployment benefits are Hispanic or Latino as are in the workforce, even though Hispanic or Latino workers were disproportionately unemployed (see Figure 4). 31

The heralded Paycheck Protection Program (PPP), which offered affected businesses and workers forgivable loans (in effect grants), saved many fewer jobs than the lofty anticipated 30 million; in the first two months of the program, researchers estimate that only 2.3 million jobs were saved, at a price of $286,000 each. 32 The PPP grants that were distributed seemed mismatched with the unemployment rate in those sectors. According to a Washington Post analysis, 32% of jobs lost were in the lodging, restaurants, and bar industry (a core component of hospitality and leisure), but the industry only received 8% of PPP grants. Similarly, the arts, entertainment & recreation industry had a job loss rate three times higher than the portion of PPP grants it received. Correspondingly, finance and insurance companies that relatively prospered throughout the pandemic received over $8 billion in PPP funds. Put another way, finance and insurance received over $350,000 in PPP funding per job lost from February to April as compared to about $8,000 in arts, entertainment, and recreation, and $7,800 in accommodation and food services. 33

Table 3: Paycheck Protection Program (PPP) spending, by industry 34

Much of the Coronavirus Aid, Relief and Economic Security (CARES) Act money allocated directly to state and local governments was allocated by population, despite the demonstrated disparate geographic and economic effects of COVID-19. 35  Allocating by population rather than economic impact results in too little money going to states and local government suffering larger economic consequences. Because the economic geography of COVID-19 fell disproportionately Hispanic or Latino workers, this error will have consequences for racial equity; funding misallocation exacerbates existing racial income and wealth gaps.

Even if all unemployment benefits, PPP loans, and other COVID-19 aid were distributed in the most equitable way possible, people of color—especially Hispanic or Latino workers—are more likely to be unemployed in general and because of COVID-19, more likely to live in the key metro areas disproportionately hit by the recession, and are more likely to contract COVID-19. The impacts of the recession will also not disappear in the years to come. Hispanic or Latino workers who lost their job over the course of the pandemic may not be able to find work for months or years after the final COVID-19 aid has been distributed. There will also be a long lag in tourism’s recovery. Even if most Americans who want to be have been vaccinated, international tourism and close contact among people may take months or years to recover. Stimulus spending and temporary aid are a great starting point, but policymakers should pay attention to the industries and people who will face an uphill battle in the foreseeable future.

For government aid to maximize its assistance to vulnerable Americans, increased attention to actual need is necessary. Specific improvements include:

  • Focus support to businesses in more impacted industries, such as hospitality and leisure as opposed to blanket first-come, first-served funding for all industries.
  • Increase assistance to metro areas that depend on the hardest-hit industries such as Las Vegas, Orlando, and Reno.
  • Reverse discriminatory rules that reduce access for negatively impacted populations, such as precluding parents from receiving child benefits based on one parent’s nationality. This is one area where the COVID-19 legislation passed by Congress in December showed improvement.
  • Realize that geography interacts with economics and race as the nation turns to the aftermath of the COVID-19 recession, and that the recession’s impact will be larger and longer for some communities.

Full PDF version of this report available here .

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Special thanks to William E. Brown, Jr., UNLV Director of Brookings Mountain West, and Caitlin Saladino, Director of Strategic Development of Brookings Mountain West for their input. Thanks also to: Ashley LeClair for editing and formatting the final report; Mia Seymour for her research support; and to Becca Portman for her data visualization assistance.

  • World Travel and Tourism Council, “Cities Economic Impact Report,” 2019 ( )
  • U.S. Bureau of Labor Statistics, “Economy at a Glance: Las Vegas-Paradise, NV,” 2019 annual ( )
  • U.S. Bureau of Labor Statistics, “Economy at a Glance: Orlando-Kissimmee-Sanford,FL,” 2019 ( );U.S. Bureau of Labor Statistics, “Economy at a glance: Reno-Sparks,” 2019 ( )
  • U.S. Bureau of Labor Statistics, “Occupation Employment Statistics Seattle,” May 2019 ( ); U.S. Bureau of Labor Statistics, “Occupational Employment Statistics San Francisco,” May 2019 ( )
  • U.S. Bureau of Labor Statistics, “Occupational Employment Statistics Orlando,” May 2019 ( ); U.S. Bureau of Labor Statistics, “Occupational Employment Statistics Las Vegas,” May 2019 ( ); U.S. Bureau of Labor Statistics, “Occupational Employment Statistics Reno,” May 2019 ( )
  • U.S. Bureau of Labor Statistics, “Occupational Employment Statistics Orlando,” May 2019 ( ); U.S. Bureau of Labor Statistics, “Occupational Employment Statistics Las Vegas,” May 2019 ( ); U.S. Bureau of Labor Statistics, “Occupational Employment Statistics Reno,” May 2019 (
  • U.S. Bureau of Labor Statistics, “Over-the-Year Change in Unemployment Rates for Metropolitan Areas,” November 2020 ( )
  • Aaron Klein and Ariel Gelrud Shiro, “The Covid-19 recession hit Latino workers hard. Here’s what we need to do.,” October 2020 ( )
  • U.S. Bureau of Labor Statistics, “Labor Force Statistics from the Current Population Survey,” December 2020 ( )
  • Ben Popken, “America’s $100 billion convention industry is back, but changed forever’” June 2020 ( )
  • UNLV Lee Business School, “Economic Data – Las Vegas/Clark County,” December 2020 ( )
  • Federal Aviation Administration, “Air Traffic Activity System” ( )
  • U.S. Bureau of Labor Statistics, “Over-the-Year Change in Unemployment Rates for Metropolitan Areas,” November 2020 ( ); Nevada Department of Employment, Training & Rehabilitation, “Current Payroll Employment Estimates,” 2019 ( )
  • U.S. Bureau of Labor Statistics, “Economy at a Glance,” November 2020. For Las Vegas-Paradise, Washington, D.C., Reno, San Francisco-Oakland-Hayward, Seattle-Tacoma-Bellevue, and Orlando-Kissimmee-Sanford. ( )
  • U.S. Bureau of Labor Statistics, “Economy at a Glance,” November 2020. For Las Vegas-Paradise, Washington, D.C., Reno, San Francisco-Oakland-Hayward, Seattle-Tacoma-Bellevue, and Orlando-Kissimmee-Sanford. (
  • McKinsey and Company, “How COVID-19 has pushed companies over the technology tipping point—and transformed business forever,” October 2020 ( )
  • U.S. Bureau of Labor Statistics, “Employment by industry, monthly changes,” December 2020 ( ) ; OCED, “E-Commerce in the time of Covid-19,” October 2020, ( ) ; Jay Greene (The Washington Post), “Amazon now employs more than 1 million people,” October 2020 ( )
  • Todd Spangler (Variety), “Facebook to Hire 10,000 Workers this Year, Sets Plans for Doling out $100M in Aid to Small Businesses,” April 2020 ( )
  • U.S. Bureau of Labor Statistics, “Employment by industry, monthly changes,” December 2020 ( )
  • U.S. Bureau of Labor Statistics, “Employment by Industry, monthly changes,“ ( )
  • U.S. Bureau of Labor Statistics, ”Employment by Industry, monthly changes,” 2020 ( )
  • U.S. Bureau of Labor Statistics, “Labor Force Statistics from the Current Population Survey,” December 2020 ( )
  • U.S. Bureau of Labor Statistics, “Labor Force Statistics from the Current Population Survey,” January 2021 ( )
  • Southern Nevada Health District, “COVID-19 Maps, Reports, and Trends,” January 2021 ( )
  • Centers for Disease Control and Prevention, ”COVID Data Tracker,” 2021 ( )
  • Peter Whoriskey, Douglas MacMillan, and Jonathan O’Connell (Washington Post), “‘Doomed to fail’: Why a $4 trillion bailout couldn’t revive the American Economy,” October 2020 ( )
  • Lauren Wamsley (NPR), “Gov. Says Florida’s Unemployment System Was Designed To Create ‘Pointless Roadblocks,” August 2020 ( )
  • Joyce Lupiani and Angelina Baray (KTNV), “TIMELINE: Nevada Dept. of Employment and handling of pandemic unemployment claims,” January 2021 ( ); Darcy Spears (KNTV), “Class-action lawsuit seeks to force Nevada’s unemployment office to do its job,” July 2020 ( )
  • The Century Foundation, ”Who is Receiving Unemployment Insurance, and Who Just Lost $600 Per Week?,” August 2020, ( )
  • Stephanie Ruhle, Leticia Miranda, and Michael Cappetta (NBC News), “PPP likely saved 35 million jobs, says JPMorgan Chase CEO Jamie Dimon,” August 2020 ( ); David Autor, David Cho, Leland D. Crane, Mita Goladar, Byron Lutz, Joshua Montes, William B. Peterman, David Ratner, Daniel Villar, Ahu Yildirmaz (National Bureau of Economic Research), “An Evaluation of the Paycheck Protection Program Using Administrative Payroll Microdata,“ July 2020 ( )
  • Authors’ calculations based on: Bureau of Labor Statistics, “Employment, Hours, and Earnings from the Current Employment Statistics survey (National),” for the ‘Arts, entertainment, and recreation,’ ‘Accommodation and Food Services,” and ‘Finance and Insurance’ subsectors, February and April 2020 ( ); Peter Whoriskey, Douglas MacMillan, and Jonathan O’Connell (Washington Post), “ ‘Doomed to fail’: Why a $4 trillion bailout couldn’t revive the American Economy,” October 2020 ( )
  • Jared Walczack (Tax Foundation), “State and Local Funding Totals Under the CARES Act,” April 2020 ( )

Economic Studies

Center for Economic Security and Opportunity

Blair Levin

February 13, 2024

Jacob Taylor, Daniel Bicknell, Anthony F. Pipa

December 9, 2022

Stuart M. Butler, Nehath Sheriff

June 22, 2021

Post-pandemic world economy still feeling COVID-19’s sting

Window cleaners work in Muntinlupa City, Philippines.

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Prospects for a robust global economic recovery remain dim as the lingering effects of the COVID-19 pandemic carry on, according to the UN’s latest World Economic Situation and Prospects report, released on Tuesday.

Risks of a prolonged period of low growth stand, amid stubborn inflation, rising interest rates, and heightened uncertainties, in addition to the ever-worsening impact of climate change, the report found.

Challenging development

The current global economic outlook also presents an immediate challenge to delivering on the Sustainable Development Goals (SDGs), said Li Junhua, Under-Secretary-General for the Department of Economic and Social Affairs ( DESA ).

“The global community must urgently address the growing shortages of funding faced by many developing countries, strengthening their capacities to make critical investments in sustainable development and helping them transform their economies to achieve inclusive and sustained long-term growth ,” he said.

According to the report, the world economy is now projected to grow by 2.3 per cent in 2023 and 2.5 per cent in 2024 , a slight uptick in the global growth forecast for 2023, according to the report, which is produced by DESA.

Regional impact

In the United States, resilient household spending has prompted upward revision of the growth forecast to 1.1 per cent in 2023.

Driven by lower gas prices and robust consumer spending, the European Union’s economy is now projected to grow by 0.9 per cent. As a result of COVID-19 related restrictions being lifted, China’s growth in 2023 is now forecast to be 5.3 per cent.

Sombre picture lingers

Despite this uptick, the growth rate is still well below the average growth rate in the two decades before the pandemic, of 3.1 per cent.

For many developing countries, growth prospects have deteriorated amid tightening credit conditions and rising costs of external financing. In Africa and Latin America and the Caribbean, gross domestic product (GDP) per capita is projected to increase only marginally this year, reinforcing a longer-term trend of stagnating economic performance .

The least developed countries are forecast to grow by 4.1 per cent in 2023 and 5.2 per cent in 2024, far below the seven per cent growth target set in the 2030 Agenda for Sustainable Development .

Global trade remains under pressure due to geopolitical tensions, weakening global demand and tighter monetary and fiscal policies. The volume of global trade in goods and services is forecast to grow by 2.3 per cent in 2023, well below the pre-pandemic trend.

Eggs on sale at a food market in Medellin, Colombia.

Stubbornly high inflation

Inflation remained stubbornly high in many countries even as international food and energy prices fell substantially in the past year. Average global inflation is projected at 5.2 per cent in 2023, down from a two decade high of 7.5 per cent in 2022.

While upward price pressures are expected to slowly ease, inflation in many countries will remain well above central banks’ targets. Amid local supply disruptions , high import costs and market imperfections, domestic food inflation is still elevated in most developing countries, disproportionately affecting the poor , especially women and children.

Risks for developing countries

Rapid tightening of global financial conditions poses major risks for many developing countries and economies in transition. Rising interest rates , coupled with a shift in developed economies from quantitative easing to quantitative tightening, have exacerbated debt vulnerabilities and further constrained public spending options.

Current policy challenges call for stronger cross-border policy cooperation and concerted global actions to prevent many developing economies from becoming trapped in a vicious cycle of low growth and high debt.

A woman waters vegetables in a market garden established on formerly degraded land in Ouallam, Niger. The garden is shared by refugees, internally displaced people and locals.

Labour gains

Labour markets in the United States, Europe, and other developed economies have continued to show remarkable resilience, contributing to sustained robust household spending . Amid widespread worker shortages and low unemployment rates, wage gains have picked up.

Employment rates are at record high levels in many developed economies with gender gaps narrowing since the pandemic.

Exceptionally strong labour markets are, however, making it harder for central banks to tame inflation. The Federal Reserve, the European Central Bank, and central banks in other developed countries have continued to raise interest rates in 2023, but at a slower pace than last year, which saw the most aggressive monetary tightening in decades.

The banking sector turmoil in the United States and Europe has added new uncertainties and challenges for monetary policy.

Although swift and decisive actions by regulators helped contain financial stability risks, vulnerabilities in the global financial architecture and the measures taken to contain them will likely dampen credit and investment growth going forward.

Shop workers sell bread at a bakery in Constantine, Algeria during the COVID-19 pandemic.

  • World Economic Situation and Prospects Report

The Economy after COVID-19

James D. Gwartney

  • Daily Economy
  • Free Markets
  • Economic Education
  • Authoritarianism

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One thing is certain: life in America is not going to be the same after COVID-19. Like the Great Depression and World War II, the pandemic will exert an impact for years, perhaps even decades, on the nation’s economic and political fortunes.

Some of the changes cannot be predicted. However, we can anticipate some long-term effects. Here are six areas that will see major alterations.

1. The economy’s structure will change. The virus and lockdown crisis forced people to do things differently. Some people have discovered options that will cause them to make different choices in the future. For example, some businesses will use online meeting technology more intensely in the future, expanding work-at-home opportunities and potentially cutting back on travel to meetings. Some doctors and patients have discovered that online doctor visits work well compared to office visits. Some educational institutions and students may even find that online education works well and is more economical than in-person education. Some people have learned to cook and others discovered how to enhance their living spaces.

These changes will exert a positive impact on some sectors of the economy and an adverse impact on others.

2. Government debt will affect growth. The increases in federal expenditures and the reduction in government revenue are being financed almost exclusively by borrowing and will push the federal debt to $30 trillion sometime during 2021. This is 140 percent of GDP, a historically high figure, greater than even the level at the height of World War II. Currently, interest rates are low, which will reduce the cost of servicing this debt. But interest rates will inevitably rise at some point, and the additional interest cost will have to be covered by either higher taxes or money creation. The former will slow future economic growth, while the latter will be inflationary.

3. The Fed is likely to make monetary policy errors. Monetary policy exerts its impact on both output and the price level with a lag. The Fed may not even know when the crisis has ended; thus it will be difficult for the Fed to follow a policy consistent with price stability. The risk of policy error is great. The Fed may be too expansionary, leading to high rates of inflation. Or it may not be expansionary enough, and therefore the recovery will be weak. If either of these errors occur, economic instability and slower future growth will result.

4. Government regulations will be reassessed. If regulatory reforms facilitating telemedicine and provision of healthcare and other services across state boundaries and increasing the speed of developing life-saving drugs made sense during the COVID-19 crisis, why not make the reforms permanent? Removal of rules, regulations, licenses, and certifications that act as entry barriers, rather than protect public safety, could increase the flexibility of the U.S. economy and its resilience to future shocks from pandemics and other sources.

5. International trade and travel will be increasingly restricted. The United States and several other countries argue that China covered up the dangers of the COVID-19 virus and even encouraged international travel from China in January and February of 2020, thereby contributing to the worldwide spread of the virus. As a result, leading political figures argue for imposing trade restrictions on China to punish it for its irresponsible actions. The United States and other countries also imposed restraints on the export of health care equipment such as ventilators and respirators during the crisis.

These actions are likely to lead to more trade restrictions. Might they result in a trade war like the one generated by the 1930 Smoot-Hawley Tariff Act? If so, the nation’s (and the world’s) future output will be lower, and living standards will suffer. That is because modern living standards are the result of the specialization and interconnected exchanges that occur daily. And if politically managed trade replaces market exchange, both rent-seeking and political corruption will expand.

6. A ratchet effect is likely in government expenditures and intervention. Economic historian Robert Higgs observes that government intervention increases during a crisis, and virtually never falls back to the pre-crisis level. Expenditures during the crisis create interest groups that lobby for continued spending after the crisis is over. The government becomes more and more involved in the economy. Replacement of markets with political allocation leads to a less efficient allocation of resources and an increase in political corruption. Will the COVID-19 crisis follow this pattern?

With the passage of time, the impacts of the Great Suppression of 2020 will become more obvious. But these are areas to watch as we continue to live in interesting times.

This article is adapted from a chapter of a forthcoming book, Economics: Private and Public Choice, 17th edition, written by Gwartney, Richard Stroup, Russell Sobel, and David Macpherson (Boston: Cengage).

James D. Gwartney

James D. Gwartney

James D. Gwartney is professor of economics and policy sciences at Florida State University. He is an expert on such economic issues as taxation, labor policy, and the economic analysis of government.

His research has focused on the measurement and determination of factors that influence cross-country differences in income levels and growth rates. Dr. Gwartney is the co-author of the annual report, Economic Freedom of the World, which provides information on the consistency of institutions and policies with economic freedom for more than 150 countries.

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Impact of COVID-19 on the social, economic, environmental and energy domains: Lessons learnt from a global pandemic

a School of Information Systems and Modelling, Faculty of Engineering and Information Technology, University of Technology Sydney, NSW 2007, Australia

I.M. Rizwanul Fattah

Md asraful alam.

b School of Chemical Engineering, Zhengzhou University, Zhengzhou 450001, China

A.B.M. Saiful Islam

c Department of Civil and Construction Engineering, College of Engineering, Imam Abdulrahman Bin Faisal University, Dammam 31451, Saudi Arabia

Hwai Chyuan Ong

S.m. ashrafur rahman.

d Biofuel Engine Research Facility, Queensland University of Technology (QUT), Brisbane, QLD 4000, Australia

e Tarbiat Modares University, P.O.Box: 14115-111, Tehran, Iran

f Science and Math Program, Asian University for Women, Chattogram 4000, Bangladesh

Md. Alhaz Uddin

g Department of Civil Engineering, College of Engineering, Jouf University, Sakaka, Saudi Arabia

T.M.I. Mahlia

COVID-19 has heightened human suffering, undermined the economy, turned the lives of billions of people around the globe upside down, and significantly affected the health, economic, environmental and social domains. This study aims to provide a comprehensive analysis of the impact of the COVID-19 outbreak on the ecological domain, the energy sector, society and the economy and investigate the global preventive measures taken to reduce the transmission of COVID-19. This analysis unpacks the key responses to COVID-19, the efficacy of current initiatives, and summarises the lessons learnt as an update on the information available to authorities, business and industry. This review found that a 72-hour delay in the collection and disposal of waste from infected households and quarantine facilities is crucial to controlling the spread of the virus. Broad sector by sector plans for socio-economic growth as well as a robust entrepreneurship-friendly economy is needed for the business to be sustainable at the peak of the pandemic. The socio-economic crisis has reshaped investment in energy and affected the energy sector significantly with most investment activity facing disruption due to mobility restrictions. Delays in energy projects are expected to create uncertainty in the years ahead. This report will benefit governments, leaders, energy firms and customers in addressing a pandemic-like situation in the future.

1. Introduction

The newly identified infectious coronavirus (SARS-CoV-2) was discovered in Wuhan and has spread rapidly since December 2019 within China and to other countries around the globe ( Zhou et al., 2020 ; Kabir et al., 2020 ). The source of SARS-CoV-2 is still unclear ( Gorbalenya et al., 2020 ). Fig. 1 demonstrates the initial timeline of the development of SARS-CoV-2 ( Yan et al., 2020 ). The COVID-19 pandemic has posed significant challenges to global safety in public health ( Wang et al., 2020 ). On 31 st January 2020, the World Health Organization (WHO), due to growing fears about the rapid spread of coronavirus, announced a global epidemic and on 11 th March, the disease was recognised as a pandemic ( Chowdhury et al., 2021 ). COVID-19 clinical trials indicate that almost all patients admitted to hospital have trouble breathing and pneumonia-like symptoms ( Holshue et al., 2020 ). Clinical diagnosis has identified that COVID-19 (disease caused by SARS-CoV-2) patients have similar indications to other coronavirus affected patients, e.g. Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS) ( Wang and Su, 2020 ). The initial indication of a COVID-19 infection is coughing, fever, and short breath, and in the later stages, it can damage the kidney, cause pneumonia, and unexpected death ( Mofijur et al., 2020 ). The vulnerability of the elderly (>80 years of age) is high, with a fatality rate of ~22% of cases infected by COVID-19 ( Abdullah et al., 2020 ). The total number of confirmed COVID-19 cases has reached over 33 million as of 29 th September 2020, with more than 213 countries and regions affected by the pandemic ( Worldometer, 2020 ). Over 1,003,569 people have already passed away ( Worldometer, 2020 ) due to COVID-19. Most countries are currently trying to combat the virus spread by screening for COVID-19 in large numbers and maintaining social distancing policies with an emphasis on the health of human beings.

Fig. 1

The initial stage development timeline for COVID-19 ( Yan et al., 2020 ).

Fig. 2 shows infections and replication cycle of the coronavirus. In extreme cases, the lungs are the most severely damaged organ of a SARS-CoV-2 infected person (host). The alveoli are porous cup-formed small cavities located in the structure of the lungs where the gas exchange of the breathing process take place. The most common cells on the alveoli are the type II cells.

Fig. 2

Infections and replication cycle of the coronavirus ( Acter et al., 2020 ).

It has been reported that travel restrictions play a significant role in controlling the initial spread of COVID-19 ( Chinazzi et al., 2020 ; Aldila et al., 2020 ; Beck and Hensher, 2020 ; Bruinen de Bruin et al., 2020 ; de Haas et al., 2020 ). It has been reported that staying at home is most useful in controlling both the initial and last phase of infectious diseases ( de Haas et al., 2020 ; Cohen, 2020 , Pirouz et al., 2020 ). However, since the start of the COVID-19 pandemic, quarantines, entry bans, as well as other limitations have been implemented for citizens in or recent travellers to several countries in the most affected areas ( Sohrabi et al., 2020 ). Also, most of the industries were shutdown to lower mobility. A potential benefit of these measures is the reduction of pollution by the industrial and transportation sector, improving urban sustainability ( Jiang et al., 2021 ). Fig. 3 shows the global responses to lower the impact of the COVID-19 outbreak. There have been negative economic and social implications due to restrictions and decreased travel readiness worldwide ( Leal Filho et al., 2020 ). A fall in the volume of business activity and international events and an increase in online measures could have a long-term impact. The status of global transport and air activity as a result of the COVID-19 pandemic is shown in Fig. 4 ( International Energy Agency (IEA), 2020 ). By March 2020, the average global road haulage activity in regions with lockdowns had declined to almost 50% of the 2019 standard. Air travel has almost completely stopped in certain regions with aviation activity decreasing by over 90% in some European countries. Air activity in China recovered slightly from a low in late February, with lockdown measures somewhat eased. Nevertheless, as lockdowns spread, by the end of Q1 2020, global aviation activity decreased by a staggering 60%.

Fig. 3

Initial preventive measures to lower the COVID-19 outbreak ( Bruinen de Bruin et al., 2020 ).

Fig. 4

Global transport and aviation activity in the first quarter of the year 2020 ( International Energy Agency (IEA), 2020 ).

The spread of COVID-19 continues to threaten the public health situation severely ( Chinazzi et al., 2020 ) and greatly affect the global economy. Labour displacement, business closures and stock crashes are just some of the impacts of this global lockdown during the pandemic. According to the International Monetary Fund (IMF), the effect of COVID-19 will result in a worldwide economic decline in 2020 and a decline in the economic growth to 3% ( International Monetary Fund (IMF) ). COVID-19 has a detrimental impact on economic growth due to two primary factors. In the beginning, the exponential growth of the global epidemic directly contributed to considerable confusion about instability in the financial and capital markets. Secondly, countries have strictly regulated human movement and transport to monitor the growth of the epidemic and significantly reduced economic activity, putting pressure on both consumer and productive economic activity.

Since the 1970s, the link between economic growth and pollution has been an important global concern. The assessment of energy and financial efficiency is usually connected to environmental pollution research. Green practices at a national level, the inclusion of renewable energy, regulatory pressure and the sustainable use of natural resources are associated with environmental sustainability ( Khan et al., 2020 ). One study has shown that environmental pollution increases with economic growth and vice versa ( Cai et al., 2020 ). The strict control over movement and business activity due to COVID-19 has led to an economic downturn, which is in turn, expected to reduce environmental pollution. This paper systematically assesses how the novel coronavirus has had a global effect on society, the energy sector and the environment. This study presents data compiled from the literature, news sources and reports (from February 2020 to July 2020) on the management steps implemented across the globe to control and reduce the impact of COVID-19. The study will offer guidelines for nations to assess the overall impact of COVID-19 in their countries.

2. Impact of COVID-19 on the environmental domain

2.1. waste generation.

The generation of different types of waste indirectly creates a number of environmental concerns ( Schanes et al., 2018 ). The home isolation and pop-up confinement services in countries that have experienced major impacts of COVID-19 are standard practise, as hospitals are given priority to the most serious cases. In some countries, hotels are being used to isolate travellers for at least two weeks on entry. In several countries, such quarantine measures have resulted in consumers increasing their domestic online shopping activity that has increased domestic waste. In addition, food bought online is packaged, so inorganic waste has also increased. Medical waste has also increased. For instance, Wuhan hospitals produced an average of 240 metric tonnes of medical waste during the outbreak compared to their previous average of fewer than 50 tonnes ( Zambrano-Monserrate et al., 2020 ). This unusual situation poses new and major obstacles in the implementation of waste collection services, thus creating a new challenge for waste collection and recycling groups. With the global adaptation to exponential behavioural and social shifts in the face of COVID-19 challenges, municipal services such as waste collection and management need to alter their operations to play an important role in reducing the spread of infectious diseases.

2.1.1. Lifespan of COVID-19 on different waste media

SARS-CoV-2′s transmission activity has major repercussions for waste services. SARS-CoV-2 attacks host cells with ACE2 proteins directly. ACE2 is a cell membrane-associated enzyme in the lungs, heart and kidneys. When all the resources in the host cell are infected and depleted, the viruses leave the cell in the so-called shedding cycle ( Nghiem et al., 2020 ). Clinical and virological evidence suggests that the elimination of the SARS-CoV-2 virus is most relevant early on, right before and within a couple of days of the onset of the illness ( AEMO, 2020 ). Fomites are known as major vectors for the replication of other infectious viruses during the outbreak ( Park et al., 2015 ). Evidence from SARS-CoV-2 and other coronaviruses show that they remain effective for up to a few days in the atmosphere and on a variety of surfaces ( Fig. 5 ). The survival time of SARS-CoV-2 on hard and plastic surfaces is up to three days indicating that waste materials from COVID-19 patients may contain coronavirus and be a source of infection spread ( Chin et al., 2020 ). During the early stages of this epidemic, updated waste disposal methods to tackle COVID-19 were not implemented on the broader community. The concept of clinical waste essentially also applies to waste from contaminated homes and quarantine facilities. Throughout this pandemic, huge volumes of domestic and hospital waste, particularly plastic waste, has been generated. This has already impeded current efforts to reduce plastic waste and decrease its disposal in the environment. More effort should be made to find alternatives to heavily used plastics.

Fig. 5

The lifespan of SARS-CoV-2 on different media ( Chin et al., 2020 ; van Doremalen et al.; 2020 ; Ye et al., 2016 )

2.1.2. Waste recycling service

COVID-19 has already had significant effects on waste recycling. Initially, as the outbreak spread and lockdowns were implemented in several countries, both public authorities and municipal waste management officials had to adjust to the situation quickly. Waste disposal has also been a major environmental problem for all technologically advanced nations, as no clear information was available about the retention time of SARS-CoV-2 ( Liu et al., 2020 ). Recycling is a growing and efficient means of pollution control, saving energy and conserving natural resources ( Ma et al., 2019 ). Recycling projects in various cities have been put on hold due to the pandemic, with officials worried about the possibility of COVID-19 spreading to recycling centres. Waste management has been limited in affected European countries. For example, Italy prohibited the sorting of waste by infected citizens. Extensive waste management during the pandemic is incredibly difficult because of the scattered nature of the cases and the individuals affected. The value of implementing best management practises for waste handling and hygiene to minimise employee exposure to potentially hazardous waste, should be highlighted at this time. Considering the possible role of the environment in the spread of SARS-CoV-2 ( Qu et al., 2020 ), the processing of both household and quarantine facility waste is a crucial point of control. Association of Cities and Regions for sustainable Resource management (ACR+) has reported on the provision of separate collection services to COVID-19 contaminated households and quarantine facilities to protect frontline waste workers in Europe, as shown in Fig. 6 . ACR+ also suggests a 72-hour delay in waste disposal (the possible lifespan of COVID-19 in the environment) ( Nghiem et al., 2020 ). Moreover, the collected waste should be immediately transported to waste incinerators or sites without segregation.

Fig. 6

Recommended waste management during COVID-19 ( ACR+ 2020 ).

2.2. NO 2 emissions

Without the global pandemic, we had naively anticipated that in 2020 global emissions would rise by around 1% on a five-year basis. Instead, the sharp decline in economic activity in response to the current crisis will most probably lead to a modest drop in global greenhouse emissions. The European Space Agency (ESA), with its head office in Paris, France, is an intergovernmental body made up of 22 European countries committed to exploring the international space. To monitor air pollution in the atmosphere, the ESA uses the Copernicus Sentinel-5P Satellite. In addition to the compound contents measurement, the Copernicus Sentinel-5P troposphere monitor (TROPOMI) and other specified precision equipment measure ozone content, sulphur dioxide, carbon monoxide, and methane. Table 1 shows NO 2 emissions data acquisition by ESA using Sentinel-5P across different regions of Europe ( Financial Times, 2020 ).

NO 2 emissions data acquisition by ESA using Sentinel-5P across different regions of Europe ( Financial Times, 2020 ).

Burning fossil fuels, such as coal, oil, gas and other fuels, is the source of atmospheric nitrogen dioxide ( Munawer, 2018 ). The bulk of the NO 2 in cities, however, comes from emissions from motor vehicles (approximately 80%). Other NO 2 sources include petroleum and metal refining, coal-fired electricity, other manufacturing and food processing industries. Some NO 2 is naturally produced by lightning in the atmosphere and from the soil, water, and plants, which, taken together, constitutes not even 1% of the total NO 2 found in the air of our localities. Due to pollution variations as well as changes in weather conditions, the levels of the NO 2 in our atmosphere differ widely every day. Anthropogenic pollution is estimated to contain around 53 million tonnes of NO 2 annually. Nitrogen dioxide, together with nitrogen oxide (NO), are considered the major components of oxides of nitrogen (NOx) ( M Palash et al., 2013 ; Fattah et al., 2013 ). NO, and NO 2 are susceptible to other chemicals and form acid rain that is toxic to the environment ( Mofijur et al., 2013 ; Ashraful et al., 2014 ), WHO lists NO 2 as one of the six typical air contaminants in the atmosphere. For this reason, the amount of NO 2 in the atmosphere is used as a precise measure for determining whether the COVID-19 outbreak affects environmental pollution.

NO 2 is an irritating reddish-brown gas with an unpleasant smell, and when cooled or compressed, it becomes a yellowish-brown liquid ( Wang and Su, 2020 ). NO 2 inflames the lung linings and can decrease lung infection immunity. High levels of NO 2 in the air we breathe can corrode our body's lung tissues . Nitrogen dioxide is a problematic air pollutant because it leads to brown photochemical smog formation, which can have significant impacts on human health ( Huang et al., 2020 ). Brief exposure to high concentrations of NO 2 can lead to respiratory symptoms such as coughing, wheezing, bronchitis, flu, etc., and aggravate respiratory illnesses such as asthma. Increased NO 2 levels can have major effects on individuals with asthma, sometimes leading to frequent and intense attacks ( Munawer, 2018 ). Asthmatic children and older individuals with cardiac illness are most vulnerable in this regard. However, its main drawback is that it produces two of the most harmful air pollutants, ozone and airborne particles. Ozone gas affects our lungs and the crops we eat.

2.2.1. NO₂ emissions across different countries

According to the ESA ( European Space Agency (ESA), 2020 ), average levels of NO 2 declined by 40% between 13 th March 2020 to 13 th April 2020. The reduction was 55% compared to the same period in 2019. Fig. 7 compares the 2019-2020 NO 2 concentration ( European Space Agency (ESA), 2020 ). The displayed satellite image was captured with the TROPOMI by ESA satellite Sentinel-5P. The percentage reductions in average NO 2 emissions in European countries during the COVID-19 outbreak from 1 st April to 30 th April 2020 can be seen in Fig. 8 ( Myllyvirta, 2020 ). Portugal, Spain, Norway, Croatia, France, Italy, and Finland are the countries that experienced the largest decrease in NO 2 levels, with 58%, 48%, 47%, 43% and 41%, respectively.

Fig. 7

Comparison of the NO 2 concentration between 2019 and 2020 in Europe ( European Space Agency (ESA), 2020 ).

Fig. 8

Changes in average NO 2 emission in different countries ( Myllyvirta, 2020 ).

The average 10-day animation of NO 2 emissions throughout Europe (from 1 st January to 11 th March 2020), demonstrated the environmental impact of Italy's economic downturn, see Fig. 9 ( European Space Agency (ESA), 2020 ). In the recent four weeks (Last week of February 2020 to the third week of March 2020) the average concentration of NO 2 in Milan, Italy, has been at least 24% less than the previous four weeks. In the week of 16 – 22 March, the average concentration was 21% lower than in 2019 for the same week. Over the last four weeks of January 2020, NO 2 emissions in Bergamo city has been gradually declining. During the week of 16–22 March, the average concentration was 47% less than in 2019. In Rome, NO 2 rates were 26–35% lower than average in the last four weeks (third week of January 2020 to the third week of February 2020) than they were during the same week of 2019 ( Atmosphere Monitoring Service, 2020 ).

Fig. 9

Changes of NO 2 emission (a) over entire Italy (b) capital city (c) other cities ( European Space Agency (ESA), 2020 ; Atmosphere Monitoring Service, 2020 ).

Fig. 10 shows a comparison of NO 2 volumes in Spain in March 2019 and 2020. As per ( European Space Agency (ESA), 2020 ), Spain's NO 2 pollutants decreased by up to 20–30% due to lockdown, particularly across big cities like Madrid, Barcelona, and Seville. ESA Sentinel-5P captured the satellite image using TROPOMI. Satellite images of the 10 days between 14 th and 25 th March 2020 show that NO 2 tropospheric concentration in the areas of Madrid, Barcelona, Valencia, and Murcia ranges from 0–90 mg/m 3 . The NO 2 tropospheric concentration for Seville is almost 0 mg/m 3 for the same time. For March 2019, the average NO 2 tropospheric concentration for the Madrid area was between 90 and 160 mg/m 3 . At the same time, the range of NO 2 tropospheric concentration for Barcelona, Valencia, and Seville area was between 90–140 mg/m 3 , 90-130 mg/m 3 , and 30–50 mg/m 3 , respectively.

Fig. 10

Comparison between before and after lockdown NO 2 emissions in Spain ( European Space Agency (ESA), 2020 ).

Fig. 11 shows the reduction in the amount of NO 2 emissions in France in March 2019 and 2020 ( European Space Agency (ESA), 2020 ). In France, levels of NO 2 have been reduced by 20% to 30%. The ESA Sentinel-5P satellite image was captured with the TROPOMI. In Paris and other major cities, the emission levels of NO 2 considerably lowered due to lockdown. The three major areas of France where NO 2 tropospheric concentration was significant are Paris, Lyon, Marseille and their surroundings. Satellite images of the ten days between 14 th and 25 th March 2020 show that NO 2 tropospheric concentration of the Paris, Lyon, Marseille areas ranges 30–90 mg/m 3 , 20–40 mg/m 3 and 40–80 mg/m 3 , respectively. For March 2019, the average NO 2 tropospheric concentration for the same areas was reported as 100–160 mg/m 3 , 30–60 mg/m 3, and 90–140 mg/m 3 , respectively.

Fig. 11

Comparison of NO 2 emissions in France before and after lockdown ( European Space Agency (ESA), 2020 ).

Various industries across the UK have been affected by COVID-19, which has influenced air contamination. As shown in Fig. 12 , there were notable drops in the country's NO 2 emissions on the first day of quarantine ( Khoo, 2020 ). Edinburgh showed the most significant reduction. The average NO 2 emissions on 26 th March 2020, were 28 μg/m 3 while on the same day of 2019, this was 74 μg/m 3 ( Khoo, 2020 ). The second biggest reduction was observed in London Westminster where emissions reduced from 58 µg/m 3 to 30 µg/m 3 . Not all cities have seen such a significant decrease, with daily air pollution reducing by 7 μg/m 3 compared to the previous year in Manchester Piccadilly, for example ( Statista, 2020 ).

Fig. 12

(a) Changes in NO 2 emissions in the UK during lockdown ( European Space Agency (ESA), 2020 ); (b) comparison of NO 2 emissions in 2019 and 2020 ( Khoo, 2020 ).

2.3. PM emission

The term particulate matter, referred to as PM, is used to identify tiny airborne particles. PM forms in the atmosphere when pollutants chemically react with each other. Particles include pollution, dirt, soot, smoke, and droplets. Pollutants emitted from vehicles, factories, building sites, tilled areas, unpaved roads and the burning of fossil fuels also contribute to PM in the air ( Baensch-Baltruschat et al., 2020 ). Grilling food (by burning leaves or gas grills), smoking cigarettes, and burning wood on a fireplace or stove also contribute to PM. The aerodynamic diameter is considered a simple way to describe PM's particle size as these particles occur in various shapes and densities. Particulates are usually divided into two categories, namely, PM 10 that are inhalable particles with a diameter of 10 μm or less and PM 2.5 which are fine inhalable particle with a diameter of 2.5 μm or less. PM 2.5 exposure causes relatively severe health problems such as non-fatal heart attacks, heartbeat irregularity, increased asthma, reduced lung function, heightened respiratory symptoms, and premature death ( Weitekamp et al., 2020 ).

PM 2.5 also poses a threat to the environment, including lower visibility (haze) in many parts of the globe. Particulates can be transported long distances then settle on the ground or in water sources. In these contexts and as a function of the chemical composition, PM 2.5 may cause acidity in lakes and stream water, alter the nutrient balance in coastal waters and basins, deplete soil nutrients and damage crops on farms, affect the biodiversity in the ecosystem, and contribute to acid rain. This settling of PM, together with acid rain, can also stain and destroy stones and other materials such as statues and monuments, which include valuable cultural artefacts ( Awad et al., 2020 ).

2.3.1. PM emission in different countries

Due to the COVID-19 outbreak, PM emission in most countries has been reduced ( Chatterjee et al., 2020 ; Ghahremanloo et al., 2021 ; Gualtieri et al., 2020 ; Sharifi and Khavarian-Garmsir, 2020 ; Srivastava, 2020 ). Fig. 13 shows the impact of COVID19 on PM emission in a number of some countries around the world ( Myllyvirta, 2020 ). The largest reductions in PM pollution took place in Portugal, with 55%, followed by Norway, Sweden, and Poland with reductions of 32%, 30%, and 28%, respectively. Spain, Poland, and Finland recorded PM emission reductions of 19%, 17% and 16%, respectively. Both Romania and Croatia recorded no changes in PM level, with Switzerland and Hungary recording about a 3% increase in PM emission.

Fig. 13

Reduction of PM emission in different countries ( Myllyvirta, 2020 ).

PM emissions have been significantly reduced during the epidemic in most regions of Italy. Fig. 14 illustrates the changes in COVID-19 containment emissions before and after a lockdown in major cities in Italy. According to a recent study by Sicard et al. ( Sicard et al., 2020 ), lockdown interventions have had a greater effect on PM emission. They found that confinement measures reduce PM 10 emissions in all major cities by “around 30% to 53%” and “around 35% to 56%”.

Fig. 14

Comparison of PM emission in Italy (a) PM 2.5 emission (b) Changes of PM 2.5 emission (c) PM 10 emission (d) Changes of PM 10 emission ( Sicard et al., 2020 ).

2.4. Noise emission

Noise is characterised as an undesirable sound that may be produced from different activities, e.g. transit by engine vehicles and high volume music. Noise can cause health problems and alter the natural condition of ecosystems. It is among the most significant sources of disruption in people and the environment ( Zambrano-Monserrate and Ruano, 2019 ). The European Environment Agency (EEA) states that traffic noise is a serious environmental problem that negatively affects the health and security of millions of citizens in Europe. The consequences of long-term exposure to noise include sleep disorders, adverse effects on the heart and metabolic systems, and cognitive impairment in children. The EEA estimates that noise pollution contributes to 48,000 new cases of heart disease and 12,000 early deaths per year. They also reported chronic high irritation for 22 million people and a chronic high level of sleep disorder for 6.5 million people ( Lillywhite, 2020 ).

Most governments have imposed quarantine measures that require people to spend much more time at home. This has considerably reduced the use of private and public transport. Commercial activities have almost completely stopped. In most cities in the world, these changes have caused a significant decline in noise levels. This was followed by a significant decline in pollution from contaminants and greenhouse gas emissions. Noise pollution from sources like road, rail or air transport has been linked to economic activity. Consequently, we anticipate that the levels of transport noise will decrease significantly due to the decreased demand for mobility in the short term ( Ro, 2020 ).

For example, it was obvious that environmental noise in Italy was reduced after 8 th March 2020 (the lockdown start date) due to a halt in commercial and recreational activities. A seismograph facility in Lombardy city in Italy that was severely affected by the COVID-19 pandemic indicated how the quarantine measures reduce both traffic and noise emissions. The comparison of the 24-hour seismic noise data before and after the lockdown period indicates a considerable drop in environmental noise in Italy ( Bressan, 2020 ).

3. Impact of COVID-19 on the socio-economic domain

COVID-19 has created a global health crisis where countless people are dying, human suffering is spreading, and people's lives are being upended ( Nicola et al., 2020 ). It is not only just a health crisis but also a social and economic crisis, both of which are fundamental to sustainable development ( Pirouz et al., 2020 ). On 11 th March 2020, when WHO declared a global pandemic, 118,000 reported cases spanning 114 countries with over 4,000 fatalities had been reported. It took 67 days from the first reported case to reach 100,000 cases, 11 days for the second 100,000, and just four days for the third ( United Nations Development Programme (UNDP), 2020 ). This has overwhelmed the health systems of even the richest countries with doctors being forced to make the painful decision of who lives and who dies. The COVID-19 pandemic has pushed the world into uncertainty and countries do not have a clear exit strategy in the absence of a vaccine. This pandemic has affected all segments of society. However, it is particularly damaging to vulnerable social groups, including people living in poverty, older persons, persons with disabilities, youths, indigenous people and ethnic minorities. People with no home or shelter such as refugees, migrants, or displaced persons will suffer disproportionately, both during the pandemic and in its aftermath. This might occur in multiple ways, such as experiencing limited movement, fewer employment opportunities, increased xenophobia, etc. The social crisis created by the COVID-19 pandemic may also increase inequality, discrimination and medium and long-term unemployment if not properly addressed by appropriate policies.

The protection measures taken to save lives are severely affecting economies all over the world. As discussed previously, the key protection measure adopted universally is the lockdown, which has forced people to work from home wherever possible. Workplace closures have disrupted supply chains and lowered productivity. In many instances, governments have closed borders to contain the spread. Other measures such as travel bans and the prohibition of sporting events and other mass gatherings are also in place. In addition, measures such as discouraging the use of public transport and public spaces, for example, restaurants, shopping centres and public attractions are also in place in many parts of the world. The situation is particularly dire in hospitality-related sectors and the global travel industry, including airlines, cruise companies, casinos and hotels which are facing a reduction in business activity of more than 90% ( Fernandes, 2020 ). The businesses that rely on social interactions like entertainment and tourism are suffering severely, and millions of people have lost their jobs. Layoffs, declines in personal income, and heightened uncertainty have made people spend less, triggering further business closures and job losses ( Ghosh, 2020 ).

A key performance indicator of economic health is Gross Domestic Product (GDP), typically calculated on a quarterly or annual basis. IMF provides a GDP growth estimate per quarter based on global economic developments during the near and medium-term. According to its estimate, the global economy is projected to contract sharply by 3% in 2020, which is much worse than the 2008 global financial crisis ( International Monetary Fund (IMF), 2020 ). The growth forecast was marked down by 6% in the April 2020 World Economic Outlook (WEO) compared to that of the October 2019 WEO and January 2020 WEO. Most economies in the advanced economy group are expected to contract in 2020, including the US, Japan, the UK, Germany, France, Italy and Spain by 5.9%, 5.4%, 6.5%, 7.0%, 7.2%, 9.1%, and 8.0% respectively. Fig. 15 a shows the effect of COVID-19 on the GDP of different countries around the globe. On the other hand, economies of emerging market and developing economies, excluding China, are projected to contract by only 1.0% in 2020. The economic recovery in 2021 will depend on the gradual rolling back of containment efforts in the latter part of 2020 that will restore consumer and investor confidence. According to the April 2020 WEO, the level of GDP at the end of 2021 in both advanced and emerging market and developing economies is expected to remain below the pre-virus baseline (January 2020 WEO Update), as shown in Fig. 15 b.

Fig. 15

(a) Quarterly World GDP. 2019:Q1 =100, dashed line indicates estimates from January 2020 WEO; (b) GDP fall due to lockdown in selected countries.

A particular example of a country hardest hit by COVID-19 is Italy. During the early days of March, the Italian government imposed quarantine orders in major cities that locked down more than seventeen million people ( Andrews, 2020 ). The mobility index data by Google for Italy shows there has been a significant reduction in mobility (and therefore economic activity) across various facets of life. The reported decline of mobility in retail and recreation, grocery and pharmacy, transit stations and workplaces were 35%, 11%, 45% and 34% respectively ( Rubino, 2020 ). The Italian economy suffered great financial damage from the pandemic. The tourism, and hospitality sectors were among those most severely affected by foreign countries prohibiting travel to and from Italy, and by the government's national lockdowns in early March ( Brunton, 2020 ). A March 2020 study in Italy showed that about 99% of the companies in the housing and utility sector said the epidemic had affected their industry. In addition, transport and storage was the second most affected sector. Around 83% of companies operating in this sector said that their activities had been affected by the coronavirus ( Statista, 2020 ) pandemic. In April 2020, Italian Minister Roberto Gualtieri estimated a 6% reduction in the GDP for the year 2020 ( Bertacche et al., 2020 ). The government of Italy stopped all unnecessary companies, industries and economic activities on 21 st March 2020. Therefore The Economist estimates a 7% fall in GDP in 2020 ( Horowitz, 2020 ). The Economist predicted that the Italian debt-to-GDP ratio would grow from 130% to 180% by the end of 2020 ( Brunton, 2020 ) and it is also assumed that Italy will have difficulty repaying its debt ( Bertacche et al., 2020 ).

4. Impact of COVID-19 on the energy domain

COVID-19 has not only impacted health, society and the economy but it has also had a strong impact on the energy sector ( Chakraborty and Maity, 2020 ; Abu-Rayash and Dincer, 2020 ). World energy demand fell by 3.8% in the first quarter (Q1) of 2020 compared with Q1 2019. In Q1 of 2020, the global coal market was heavily impacted by both weather conditions and the downturn in economic activity resulting in an almost 8% fall compared to Q1 2019. The fall was primarily in the electricity sector as a result of substantial declines in demand (-2.5%) and competitive advantages from predominantly low-cost natural gas. The market for global oil has plummeted by almost 5%. Travel bans, border closures, and changes in work routines significantly decreased the demand for the use of personal vehicles and air transport. Thus rising global economic activity slowed down the use of fuel for transportation ( Madurai Elavarasan et al., 2020 ). In Q1 2020, the output from nuclear energy plants decreased worldwide, especially in Europe and the US, as they adjusted for lower levels of demand. Demand for natural gas dropped significantly, by approximately 2% in Q1 2020, with the biggest declines in China, Europe, and the United States. In the Q1 2020, the need for renewable energy grew by around 1.5%, driven in recent years by the increasing output of new wind and solar plants. Renewable energy sources substantially increased in the electricity generation mix, with record hourly renewable energy shares in Belgium, Italy, Germany, Hungary, and East America. The share of renewable energy sources in the electricity generation mix has increased. Table 2 shows the effect of COVID-19 outbreak on the energy demand around the world.

Impact of COVID-19 on global energy sector ( AEMO, 2020 ; CIS Editorial, 2020 ; Eurelectric, 2020 ; Livemint, 2020 ; Renewable Energy World, 2020 ; S&P Global, 2020 ; Madurai Elavarasan et al., 2020 ).

Different areas have implemented lockdown of various duration. Therefore, regional energy demand depends on when lockdowns were introduced and how lockdowns influence demand in each country. In Korea and Japan, the average impact on demand is reduced to less than 10%, with lower restrictions. In China, where the first COVID-19 confinement measures were introduced, not all regions faced equally stringent constraints. Nevertheless, virus control initiatives have resulted in a decline of up to 15% in weekly energy demand across China. In Europe, moderate to complete lockdowns were more radical. On average, a 17% reduction in weekly demand was experienced during temporary confinement periods. India's complete lockdown has cut energy requirements by approximately 30%, which indicates yearly energy needs are lowered by 0.6% for each incremental lockdown week ( International Energy Agency (IEA) 2020 ).

The International Energy Agency (IEA) has predicted an annual average decline in oil production of 9% in 2020, reflecting a return to 2012 levels. Broadly, as electricity demand has decreased by about 5% throughout the year, coal production may fall by 8%, and the output of coal-fired electricity generation could fall by more than 10%. During the entire year, gas demand may fall far beyond Q1 2020 due to a downward trend in power and industrial applications. Nuclear energy demand will also decrease in response to reduced electricity demand. The demand for renewable energies should grow due to low production costs and the choice of access to many power systems. Khan et al. (2020) reported that international trade is significantly and positively dependent on renewable energy. In addition, sustainable growth can be facilitated through the consumption of renewable energy which improves the environment, enhances national image globally and opens up international trade opportunities with environmentally friendly countries ( Khan et al., 2021 ). As such, policies that promote renewables can result in economic prosperity, create a better environment as well as meet critical goals for sustainable development ( Khan et al., 2020 ).

5. Preventive measures to control COVID-19 outbreak

COVID-19 is a major crisis needing an international response. Governments will ensure reliable information is provided to assist the public in combating this pandemic. Community health and infection control measures are urgently needed to reduce the damage done by COVID-19 and minimise the overall spread of the virus. Self-defence techniques include robust overall personal hygiene, face washing, refraining from touching the eyes, nose or mouth, maintaining physical distance and avoiding travel. In addition, different countries have already taken preventive measures, including the implementation of social distancing, medicine, forestation and a worldwide ban on wildlife trade. A significant aim of the community health system is to avoid SARS-CoV-2 transmission by limiting large gatherings. COVID-19 is transmitted by direct communication from individual to individual. Therefore, the key preventive technique is to limit mass gatherings. Table 3 shows the impact of lockdown measures on the recovery rate of COVID-19 infections. The baseline data for this table is the median value, for the corresponding day of the week, during the 5-week period 3 rd January to 6 th February 2020.

Mobility index report of different countries ( Ghosh, 2020 ; Johns Hopkins University (JHU), 2020 ; Worldometer, 2020 ).

As of today, no COVID-19 vaccine is available. Worldwide scientists are racing against time to develop the COVID-19 vaccine, and WHO is now monitoring more than 140 vaccine candidates. As of 29 th September 2020, about 122 candidates have been pre-clinically checked, i.e. determining whether an immune response is caused when administering the vaccine to animals ( Biorender, 2020 ). About 45 candidates are in stage I where tests on a small number of people are conducted to decide whether it is effective ( Biorender, 2020 ). About 29 candidates are in Phase II where hundreds of people are tested to assess additional health issues and doses ( Biorender, 2020 ). Only 14 candidates are currently in Phase III, where thousands of participants are taking a vaccine to assess any final safety concerns, especially with regard to side effects ( Biorender, 2020 ). 3 candidates are in Phase IV, where long-term effects of the vaccines on a larger population is observed ( Biorender, 2020 ). The first generation of COVID-19 vaccines is expected to gain approval by the end of 2020 or in early 2021 ( Peiris and Leung, 2020 ). It is anticipated that these vaccines will provide immunity to the population. These vaccines can also reduce the transmission of SARS-CoV-2 and lead to a resumption of a pre-COVID-19 normal. Table 4 shows the list of vaccines that have been passed in the pre-clinical stage. In addition, according to the COVID-19 vaccine and therapeutics tracker, there are 398 therapeutic drugs in development. Of these, 83 are in the pre-clinical phase, 100 in Phase I, 224 in Phase II, 119 in Phase III and 46 in Phase IV ( Biorender, 2020 ).

List of vaccines that have passed the pre-clinical stage ( Biorender, 2020 ).

In addition to the above, forestation and a worldwide ban on wildlife trade can also play a significant role in reducing the spread of different viruses. More than 30% of the ground area is covered with forests. The imminent increase in population contributes to deforestation in agriculture or grazing for food, industries and property. The rise in ambient temperature, sea levels and extreme weather events affects not only the land and environment but also public health ( Ruscio et al., 2015 ; Arora and Mishra, 2020 ). Huge investment has been made into treatments, rehabilitation and medications to avoid the impact of this epidemic. However, it is important to focus on basic measures, e.g. forestation and wildlife protection. The COVID-19 infection was initially spread from the Seafood Market, Wuhan, China. Therefore, China temporarily banned wildlife markets in which animals are kept alive in small cages. It has been reported that 60% of transmittable diseases are animal-borne, 70% of which are estimated to have been borne by wild animals ( Chakraborty and Maity, 2020 ). Deforestation is also related to various kinds of diseases caused by birds, bats, etc. ( Afelt et al., 2018 ). For example, COVID-19 is a bat-borne disease that is transmitted to humans. Therefore, several scientists have advised various countries to ban wildlife trade indefinitely so that humans can be protected from new viruses and global pandemics like COVID-19.

6. Conclusion

In this article, comprehensive analyses of energy, environmental pollution, and socio-economic impacts in the context of health emergency events and the global responses to mitigate the effects of these events have been provided. COVID-19 is a worldwide pandemic that puts a stop to economic activity and poses a severe risk to overall wellbeing. The global socio-economic impact of COVID-19 includes higher unemployment and poverty rates, lower oil prices, altered education sectors, changes in the nature of work, lower GDPs and heightened risks to health care workers. Thus, social preparedness, as a collaboration between leaders, health care workers and researchers to foster meaningful partnerships and devise strategies to achieve socio-economic prosperity, is required to tackle future pandemic-like situations. The impact on the energy sector includes increased residential energy demand due to a reduction in mobility and a change in the nature of work. Lockdowns across the globe have restricted movement and have placed people primarily at home, which has, in turn, decreased industrial and commercial energy demand as well as waste generation. This reduction in demand has resulted in substantial decreases in NO 2, PM, and environmental noise emissions and as a consequence, a significant reduction in environmental pollution. Sustainable urban management that takes into account the positive benefits of ecological balance is vital to the decrease of viral infections and other diseases. Policies that promote sustainable development, ensuring cities can enforce recommended measures like social distancing and self-isolation will bring an overall benefit very quickly. The first generation of COVID-19 vaccines is expected to gain approval by the end of 2020 or in early 2021, which will provide immunity to the population. It is necessary to establish preventive epidemiological models to detect the occurrence of viruses like COVID-19 in advance. In addition, governments, policymakers, and stakeholders around the world need to take necessary steps, such as ensuring healthcare services for all citizens, supporting those who are working in frontline services and suffering significant financial impacts, ensuring social distancing, and focussing on building a sustainable future. It is also recommended that more investment is required in research and development to overcome this pandemic and prevent any similar crisis in the future.

Declaration of Competing Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Editor: Dr. Syed Abdul Rehman Khan

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Covid transformed the U.S. labor market, and it isn’t done yet

Customers dine outside at a restaurant in Washington, D.C, on Feb. 23, 2023.

After a three-year national health emergency, over 1.1 million Covid deaths , a wave of retirements and high inflation , the U.S. labor force is smaller and tighter than before the pandemic. For workers, that means continued leverage to secure pay gains and better conditions even as the economy cools.

The labor market rebounded sharply from the blow dealt by Covid-19 as it swept the country in early 2020, thanks to aggressive federal relief measures and widespread vaccine rollouts. But the health crisis transformed the economy in ways that have persisted throughout the recovery, and analysts expect its ripple effects to linger despite a hiring slowdown and simmering recession fears.

When the world shut down in March 2020, low-wage workers in hospitality and other service roles saw some of the steepest job losses amid the sharpest drop in employment post-WWII , according to a National Bureau of Economic Research (NBER) study in March. While some parts of the economy have rebounded beyond pre-pandemic metrics, employers in many industries are still contending with staffing challenges.

Spending is back, demand for labor is back, but we have a smaller labor force.

— Wendy Edelberg, the brookings institution

“Spending is back, demand for labor is back, but we have a smaller labor force,” said Wendy Edelberg, director of the Hamilton Project and a senior fellow at the Brookings Institution. “That is one of the reasons why the labor market feels tight and why firms have been reporting left, right and center that they’re having a hard time finding workers.”

The U.S. population is 1.4 million people shy of pre-pandemic projections based on its growth rate before Covid hit, according to an April Brookings analysis of federal data. About 900,000 of those “missing” people would have been expected to be working.

Edelberg attributed roughly 650,000 of those absences to deaths (Covid-related or otherwise) and the remaining 250,000 to immigration policies during the pandemic — particularly Title 42, a Trump administration measure that expire d Thursday night along with the federal public health emergency.

Many of the nation’s workers continue to suffer from health effects incurred during the pandemic.

A January report by the New York State Insurer’s Fund, the state’s largest workers’ compensation carrier, found that during the first two years of the pandemic, 71% of patients with “long Covid” symptoms required ongoing medical treatment or didn’t return to work for six months or longer.

A report from the management consulting firm McKinsey & Co., also from January, estimated that the economy lost 315 million to more than 1 billion working days among U.S. employees because of Covid last year alone, equivalent to 1.3 million to 4.3 million people’s leaving the workforce.

“At the high end, that’s about double the average number of sick days taken by US workers in the decade before the pandemic,” the researchers wrote.

A key reason the labor market remains so tight is that the pandemic collided with an already aging U.S. population.

Some older workers bowed out of the workforce earlier than planned as employers slashed jobs and furloughed staff. As the subsequent recovery kicked off a hiring spree, many recent retirees came back off the sidelines, but others stayed put.

A recent study by the Federal Reserve Bank of New York flagged a 2.1 million worker “participation gap,” which it largely attributed to the aging of the massive baby boomer population and a surge in retirements.

While job growth is finally cooling down and layoffs have been piling up for months, many employers remain hungry to hire . Government data showed 9.6 million job openings in March , coming down from last year’s levels but still much higher than the roughly 7 million openings posted before the pandemic — in what was already a hot market at the time.

Last month the U.S. added 253,000 roles , continuing a lengthy run of job gains that have been a boon to workers, with many taking part in the so-called Great Resignation to seek out better opportunities and work-life balance, or even entirely new careers during the economic recovery. Others have reaped rewards by sticking around , as bosses add incentives to retain staffers.

Wage growth at the bottom is really making the labor market more equal.

— Arindrajit Dube, UMass Amherst

“We’ve had this huge imbalance between demand for employees and supply of employees for the last couple of years,” said Paige Ouimet, a finance professor at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill.

“It’s slowly starting to shift,” she said, “but it is still a different situation in terms of the bargaining power that employees have relative to their employers.”

An NBER study from March found that wage gains among the lowest-paid workers have substantially slowed the growth of income inequality. Arindrajit Dube, a study co-author and economist at the University of Massachusetts, Amherst, said the scale of low earners’ pay gains was striking — rising 6% from January 2020 to September 2022.

“Wage growth at the bottom is really making the labor market more equal,” Dube said.

Lower-wage workers have been pulling in more income “because they’ve been able to leave, because they’ve been able to find better jobs,” he said. The trend has fanned a pandemic-era surge in labor organizing efforts , including at name brands such as Starbucks and Amazon, as workers test their leverage.

There are also signs that the tight competition for workers is increasing labor participation among certain groups.

According to Brookings, women ages 25-54 boosted their labor force participation by 1.5 percentage points since 2019, and Black people aged 25-64 did so by 1.7 percentage points over the same period.

Some demographics, however, are seeing the opposite trend. “White men of all ages and older white women are participating less” in the workforce, the Brookings researchers wrote . Labor force participation among white men ages 20 and older stood at 70.1% in April , down from 71% in March 2020.

The 23% labor force participation rate among people with disabilities is up from 20.7% in 2019, according to federal employment data . The uptick reflects the many disabled workers who have entered the workforce during the job boom — as well as the increase in people working with long Covid.

Remote and flexible work arrangements have made many jobs more accessible to those with disabilities. Government data showed 27.5% of private employers allowing full- or part-time telework as of last fall, the latest data available.

“I’m very confident that the ability to work remotely will continue to affect who works and who doesn’t,” said Edelberg of Brookings. “Those effects are not fully settled down in the data. That’s with us for a long time.”

essay on economy after covid 19

J.J. McCorvey is a business and economy reporter for NBC News.

essay on economy after covid 19

Sara Ruberg is an associate producer with NBC News.

essay on economy after covid 19

Brian Cheung is a business and data correspondent for NBC News.

These countries are the most optimistic about economic recovery from the pandemic

many businesses, such as this one here with the shutters down, were closed during COVID-19. People in different countries have varying ideas about when they think the economy will bounce back

People in different countries have varying levels of optimism about when they think the economy will bounce back. Image:  Unsplash/Ross Sneddon

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  • China is the most optimistic country when people are asked when they think there will be an economic recovery from the pandemic.
  • By comparison, people in Russia are the most pessimistic.
  • One thing most people seem to agree on is that they expect their governments to take responsibility for leading the return to growth.

More than half of people in China think the economy there has already recovered from the pandemic.

That’s one of the headline findings of a survey carried out by Ipsos and the World Economic Forum, between 25 June and 9 July. Altogether, more than 21,500 people in 29 countries were quizzed on their views of post-pandemic economic life.

Some 56% of Chinese respondents said things were already back to where they should be. That number shoots up to 83% when those who think the recovery will have happened within a year are factored in.

In Saudi Arabia too, a majority of people (63%) think the recovery will have happened in a year’s time. There, 25% say the economy has already recovered.

this chart shows when people across different countries think their country will recover from the pandemic

Elsewhere, however, optimism is in shorter supply. Of the 29 countries surveyed, Russia, Colombia, South Africa and Romania are the places where the fewest people expect a swift recovery.

In Russia, just 4% of people think the recovery has happened and just 6% more think things will be better in a year. A large majority (66%) expect to have to wait more than three years for the economy to bounce back.

Have you read?

We asked young people about work and skills. here's what they told us, world leaders must put women at centre of covid-19 recovery, covid-19 recovery: some economies will take longer to rebound – this is bad for everyone.

Between one half and two-thirds of survey respondents in South Africa, Argentina, Romania, Colombia, Hungary, and Poland say they think economic recovery is more than three years away, following the pandemic.

Looking ahead

When it comes to the question of who should assume responsibility for leading a country to economic recovery, the answer given most often by respondents was their government. Averaged across all 29 countries, that was the view of 53% of people. But 48% of people didn’t mention their government at all when thinking about where a recovery might come from, indicating a possible lack of trust in their national leaders.

this chart shows that when asked who should assume responsibility for leading a country to economic recovery, the answer given most often by respondents was their government

In Russia, nine out of 10 people surveyed said the government carries the responsibility for sorting things out. Close behind, other countries where a very large majority felt that way include Hungary (88%), South Korea (86%), China (78%), Malaysia (73%) and Saudi Arabia (70%).

An almost-mirror-image of those findings came when Ipsos asked whether small businesses should be responsible for the post-pandemic economic recovery. Low numbers of people in Russia (7%), South Korea (10%), Hungary (14%), and Saudi Arabia (19%) thought that was the case. Those countries where the largest numbers of people do think small businesses have a major role to play, are all Spanish-speaking.

“The world is at a global turning point where leaders must cooperate, innovate and secure a robust recovery," said Sarita Nayyar, Managing Director, World Economic Forum, adding that corporations, civil society and governments must work together to address the major challenges facing the globe and that "those that focused on the short-term have been the first to suffer".

Reading the signs

The survey also looked at what people think an economic recovery looks and feels like – the signs that will tell them things are getting better. It transpires there are two things that lead people to think things are getting better. The first is when they see people they know being called back to work or getting a new job. An average of 79% of people gave that as their top answer. It was closely followed by seeing new businesses open (78%).

this chart shows what people think an economic recovery looks and feels like – the signs that will tell them things are getting better

Across all 29 countries surveyed, the range of answers citing those two indicators was from 63% to 89%.

The COVID-19 global pandemic continues to disrupt manufacturing and supply chains, with severe consequences for society, businesses, consumers and the global economy.

As the effects of coronavirus unfold, companies are asking what short-term actions they need to take to ensure business continuity and protect their employees. How should they be preparing for the rebound and increasing their manufacturing and supply systems’ resilience?

The World Economic Forum, in collaboration with Kearney, brought together senior-level executives from various industry sectors to identify the best response to the COVID-19 crisis. Their recommendations have been published in a new white paper: How to rebound stronger from COVID-19: Resilience in manufacturing and supply systems.

essay on economy after covid 19

Read the full white paper, and more information in our Impact Story .

Companies are invited to join the Forum’s Platform for Shaping the Future of Advanced Manufacturing and Production. Through the Platform’s work, companies can join with other leaders to help find solutions that support the reconfiguration of global value chains post-COVID-19.

An increase in tourism was also mentioned as a key sign of recovery by a global average of 72%. It was highest in China (90%), Saudi Arabia (85%) and South Africa (84%), and lowest in Argentina (52%), Russia (59%) and Colombia (60%).

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World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

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Fed Chairman Powell tests positive for COVID-19

Powell, 71, contracted the virus after a recent trip to europe, where he appeared at an event in amsterdam.

Wells Fargo CIO for Wealth & Investment Management Darrell Cronk says the April labor data was exactly what the Fed wanted to see on 'Making Money.'

Jerome Powell took rate hikes off the board: Darrell Cronk

Wells Fargo CIO for Wealth & Investment Management Darrell Cronk says the April labor data was exactly what the Fed wanted to see on 'Making Money.'

  • Federal Reserve Chair Jerome Powell tested positive for COVID-19 on Thursday and is currently working from home.
  • This announcement comes after Powell's recent trip to Europe, where he appeared at an event in Amsterdam.
  • Powell had previously tested positive for COVID-19 in January 2023.

Federal Reserve Chair Jerome Powell tested positive for COVID-19 on Thursday and is currently working from home, a Fed spokesperson said in an emailed statement.

"Chair Powell tested positive for COVID-19 late yesterday and is experiencing symptoms." He is working from home and staying away from others, the statement said, as per guidance from the U.S. Centers for Disease Control and Prevention.

The announcement follows a trip to Europe this week in which Powell, 71, appeared on Tuesday on stage at an event with Dutch central bank president Klaas Knot in Amsterdam.


Powell last tested positive for COVID in January 2023.

Jerome Powell

U.S. Federal Reserve Chair Jerome Powell responds to a question during an on-stage discussion at a meeting of The Economic Club of Washington, at the Renaissance Hotel in Washington, D.C., on Feb. 7, 2023. Powell tested positive for COVID-19 on Thurs (REUTERS/Amanda Andrade-Rhoades/File Photo / Reuters Photos)

There was little reaction in financial markets after the Fed's announcement of Powell's latest COVID-19 infection. The next scheduled Fed policy meeting is not until June 11-12.


Powell, who was due to give commencement remarks in person on Sunday at Georgetown Law School, will now deliver them via prerecorded video, the statement said.

essay on economy after covid 19

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  6. How COVID-19 has changed the global economy

    During the April 30 debut of the online series, Profs. Randall S. Kroszner , Austan D. Goolsbee and Raghuram G. Rajan discussed the critical economic questions facing the world amid the COVID-19 crisis. Moderated by Kathleen Hays of Bloomberg, the conversation ranged from the possible paths and pitfalls for recovery, to how economic sectors ...

  7. The Economic Impact of COVID-19 around the World

    For over two years, the world has been battling the health and economic consequences of the COVID-19 pandemic. As of the writing of this article, deaths attributed to COVID-19 have surpassed six-and-a-half million people. Global economic growth was severely impacted: World output by the end of 2021 was more than 4 percentage points below its ...

  8. WDR 2022 Chapter 1. Introduction

    WDR 2022 Chapter 1. Introduction. Chapter 1. The economic impacts of the COVID-19 crisis. The COVID-19 pandemic sent shock waves through the world economy and triggered the largest global economic crisis in more than a century. The crisis led to a dramatic increase in inequality within and across countries. Preliminary evidence suggests that ...

  9. The Global Economy: on Track for Strong but Uneven Growth as COVID-19

    A year and a half since the onset of the COVID-19 pandemic, the global economy is poised to stage its most robust post-recession recovery in 80 years in 2021. But the rebound is expected to be uneven across countries, as major economies look set to register strong growth even as many developing economies lag.

  10. Building back better: A sustainable, resilient recovery after COVID-19

    Building Back Better": key dimensions for a resilient economic recovery. 7. The term "Building Back Better" has been increasingly and widely used in the context of the economic recovery from COVID-19 (WRI, 2020[10]) (We Mean Business Coalition, 2020[11]). The notion originated in the context of recovery and reconstruction from physical disasters 1, with an emphasis on making preventative ...

  11. Explaining the economic impact of COVID-19: Core industries ...

    The economic impact of Covid-19. COVID-19, which devastated some industries like leisure and hospitality, barely impacted others. Table 1 shows the change in the unemployment rate among our ...

  12. How Will the World Be Different After COVID-19

    James Manyika. The world after COVID-19 is unlikely to return to the world that was. Many trends already underway in the global economy are being accelerated by the impact of the pandemic. This is especially true of the digital economy, with the rise of digital behavior such as remote working and learning, telemedicine, and delivery services.

  13. The economics of COVID-19 pandemic: A survey

    1. Introduction. This paper undertakes a survey of literature on the economics of COVID-19 1 pandemic. 2 The goal is to explore the economic effects of the COVID-19 and suggest policy directions to mitigate its magnitude.. Clark (2016) opined that a pandemic is a serial killer that can have devastating consequences on humans and the global economy. For instance, the Spanish flu in 1918 killed ...

  14. Initial Impact of COVID-19 on U.S. Economy More Widespread Than on

    The initial impact of the COVID-19 pandemic on the U.S. economy was widespread and affected people across all age groups and all states while the initial mortality impact targeted mostly older people in just a few states according to independent research by the U.S. Census Bureau.. During April 2020, the first full month of the pandemic, the United States experienced an additional 2.4 deaths ...

  15. Post-pandemic world economy still feeling COVID-19's sting

    16 May 2023 Economic Development. Prospects for a robust global economic recovery remain dim as the lingering effects of the COVID-19 pandemic carry on, according to the UN's latest World Economic Situation and Prospects report, released on Tuesday. Risks of a prolonged period of low growth stand, amid stubborn inflation, rising interest ...

  16. The Economy after COVID-19

    The Economy after COVID-19. One thing is certain: life in America is not going to be the same after COVID-19. Like the Great Depression and World War II, the pandemic will exert an impact for years, perhaps even decades, on the nation's economic and political fortunes. Some of the changes cannot be predicted.

  17. Impact of COVID-19 on the social, economic, environmental and energy

    COVID-19 is a worldwide pandemic that puts a stop to economic activity and poses a severe risk to overall wellbeing. The global socio-economic impact of COVID-19 includes higher unemployment and poverty rates, lower oil prices, altered education sectors, changes in the nature of work, lower GDPs and heightened risks to health care workers.

  18. Covid transformed the U.S. labor market, and it isn't done yet

    After a three-year national health emergency, over 1.1 million Covid deaths, a wave of retirements and high inflation, the U.S. labor force is smaller and tighter than before the pandemic.For ...

  19. Global views on COVID-19 and economic recovery

    COVID-19 recovery: some economies will take longer to rebound - this is bad for everyone. Between one half and two-thirds of survey respondents in South Africa, Argentina, Romania, Colombia, Hungary, and Poland say they think economic recovery is more than three years away, following the pandemic. Looking ahead.

  20. Prospects of the global economy after Covid-19

    The papers discuss the necessary institutional changes to address societal challenges and the necessary reforms to better manage the global financial commons. Download Prospects of the Global Economy after Covid-19 here. Big societal challenges. As pointed out by Daron Acemoglu at the start of his chapter, today's world faces four fundamental ...

  21. From Great Resignation to Great Reshuffling

    An unprecedented number of U.S. workers quit their jobs in 2021 and 2022, the first full two years of the COVID-19 pandemic — a phenomenon dubbed the Great Resignation. What followed was what's come to be known as the Great Reshuffling: Some workers exited the labor market entirely, others quit and eventually rejoined the labor force and ...

  22. EMDE Central Bank Interventions during COVID-19 to Support Market ...

    This paper examines emerging market and developing economy (EMDE) central bank interventions to maintain financial stability during the COVID-19 pandemic. Through empirical analysis and case study reviews, it identifies lessons for designing future programs to address challenges faced in EMDEs, including less-developed financial markets and lower levels of institutional credibility.

  23. A predictive strategy to mitigate the impact of the COVID-19 pandemic

    This study aimed to examine the impact of the COVID-19 pandemic on Saudi Arabia's economy and to propose a strategy based on forecasting to lessen the negative effects of the pandemic while looking ahead to economic opportunities after the pandemic. The research utilized ARIMA models to predict important economic measures in Saudi Arabia, such as GDP, exports, imports, investment in assets ...

  24. IMF Working Papers

    Central banks have come under increasing criticism for large balance sheet losses associated with quantitative easing (QE), and some observers have also argued that QE helped fuel the post-COVID-19 inflation boom. In this paper, we reconsider the conditions under which QE may be warranted considering the recent high inflation experience. We emphasize that the merits of QE should be evaluated ...

  25. Fed Chairman Powell tests positive for COVID-19

    Powell had previously tested positive for COVID-19 in January 2023. Federal Reserve Chair Jerome Powell tested positive for COVID-19 on Thursday and is currently working from home, a Fed ...

  26. Macroeconomic Factors and Jakarta Stock Exchange: A Comparative

    This study uses quantitative data, namely secondary data covering 151 months from June 2007 to December 2021 to explain the relationship between WTI crude oil prices, interest rates, US$/IDR exchange rate, inflation, and the Jakarta Composite Index before the COVID-19 pandemic, and 175 observations from June 2007 to December 2021 to explain the ...

  27. Israel's Economy Rebounds Sharply From Slump Caused by War

    3:01. Israel's economy rebounded at a pace seen only after the coronavirus pandemic, as investment, consumption and government spending powered an upswing that partly offset the shock of more ...