Jonathan Portes, 01 June 2020

Both economists and policymakers have highlighted the danger that the short-term measures taken to limit the spread of Covid-19 could lead to lasting economic damage. This column identifies and discusses five conceptually separate channels that could lead to such ‘scarring’ and attempts a very rough quantification of the potential impacts in both the short to medium term and longer term.  Policy will eventually need to ‘pivot’ from helping firms survive and preserving jobs to helping workers into new jobs.

Daiji Kawaguchi, Ayako Kondo, 13 January 2016

Economists frequently discuss the ‘scarring effects’ the Great Recession has had on young people in Europe. This column tentatively challenges the received wisdom of permanent scarring. Young graduates mitigate some of the negative welfare effects of graduating during bad times by living with their parents for longer.

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CEPR Policy Research