Name: Martin Wolf: coronavirus could be worst economic crisis since Great Depression | FT
Uploaded: 2020-04-20T11:21:16.000Z
Duration: 5 min 11 s
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Adverbs of degree

00:00:03,675 --> 00:00:06,939 The really important issue is how much of our economy

Basic passive voice

is destroyed in the process of managing the disease

Adverbs of manner

and how easily we can get back to normal.

will bring the explosion that we have recently seen in cases

We will then have testing regimes available

the major economies can follow China and begin to get back

But at an extreme opposite it may be the case we simply

have colossal increases in public debt, maybe 20 or 30

We would have many companies that have disappeared.

We would have had many people who have been unemployed

I think the trading system would probably have collapsed.

I think, in the short run, a bigger decline in output

The impact on output gross domestic product

in the developed countries will vary between minus 15 per cent

will be smaller by that amount, below what

it would have been if the crisis had never happened.

And so over a year, that will be the shrinkage of GDP?

And that's why you mustn't have it every year.

They're expecting that in advanced countries

between the end of last year and the second quarter

Thereafter, they hope, there will be a recovery.

It will be a long time to get back to the starting point,

Unfortunately, even that could prove to be too optimistic.

If we look at what sectors are being hit, well,

obviously it's travel, it's leisure, it's tourism,

we have in the developed world, so their fate

will be really much more like what happened in the '30s.

This will be a truly profound transformation.

Governments would be colossally indebted.

They would have printed an enormous amount of money.

I would expect serious inflation to emerge, one way or another.

00:03:06,530 --> 00:03:10,850 If we were to do the very best one could imagine,

be worse than the Great Recession, not necessarily

worse in the developed countries which were most directly hit

But it's very important to remember the 2007

and 2008 crisis wasn't really a global crisis.

While the developed countries were badly hit

China did incredibly well, came out very, very quickly

with an incredibly strong growth in 2009.

meant a lot of emerging and developing countries

It's affecting every economy in the world,

including China, of course, and all the emerging and developing

countries, as well as the developed countries.

If you think we are now in 1930, as it were,

we're going over a cliff faster than in 1930.

And if it goes like this for two or three years,

then I think political consequences which, ultimately,

will feed back into the economy are just wildly unpredictable

Without the Great Depression, Adolf Hitler

would never have been elected to power in Germany.

00:04:28,740 --> 00:04:32,620 It is possible, if we get the disease under control,

We're going to have to have higher taxation

and I think we'll have to strengthen our social safety

And those costs will have to be borne by the relatively

We will have to consider whether we can continue with gig

the winners to the losers in our economic system.

Otherwise, I don't believe our democratic systems

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Martin Wolf: coronavirus could be worst economic crisis since Great Depression | FT

ultimately

incredibly

depression

enormous