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The 2020 Pandemic: Economic repercussions and policy responses

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  • Lucjan T. Orlowski

Abstract

This paper analyses the economic and financial repercussions of the 2020 COVID‐19 pandemic. It argues that the pandemic has inflicted serious injuries to the labor force but has not damaged the physical capital stock. Therefore, the resolution policies of this crisis ought to be carefully tailored to supporting structural adjustments to the labor market. The analysis asserts that the impact of the pandemic crisis is exacerbated by the identification gap between the unobserved and the officially reported cases of COVID‐19. The gap increases financial risks, including market‐, credit‐, default‐, and foreign exchange risks.

Suggested Citation

  • Lucjan T. Orlowski, 2021. "The 2020 Pandemic: Economic repercussions and policy responses," Review of Financial Economics, John Wiley & Sons, vol. 39(1), pages 20-26, January.
    • Handle: RePEc:wly:revfec:v:39:y:2021:i:1:p:20-26
    DOI: 10.1002/rfe.1123
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    References listed on IDEAS

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    1. Ozge Akinci & Gianluca Benigno & Albert Queraltó, 2020. "Modeling the Global Effects of the COVID-19 Sudden Stop in Capital Flows," Liberty Street Economics 20200518, Federal Reserve Bank of New York.
    2. Nicolas Petrosky-Nadeau & Robert G. Valletta, 2020. "Unemployment Paths in a Pandemic Economy," Working Paper Series 2020-18, Federal Reserve Bank of San Francisco.
    3. Orlowski, Lucjan T. & Soper, Carolyne, 2019. "Market risk and market-implied inflation expectations," International Review of Financial Analysis, Elsevier, vol. 66(C).
    4. Emanuel Kohlscheen & Benoit Mojon & Daniel Rees, 2020. "The macroeconomic spillover effects of the pandemic on the global economy," BIS Bulletins 4, Bank for International Settlements.
    5. Lucjan T. Orlowski, 2008. "Stages of the Ongoing Global Financial Crisis: Is There a Wandering Asset-Price Bubble?," CASE Network Studies and Analyses 0372, CASE-Center for Social and Economic Research.
    6. Orlowski, Lucjan T., 2008. "Stages of the 2007/2008 Global Financial Crisis Is There a Wandering Asset-Price Bubble?," Economics Discussion Papers 2008-43, Kiel Institute for the World Economy (IfW Kiel).
    7. Orlowski, Lucjan T., 2008. "Stages of the Ongoing Global Financial Crisis: Is There a Wandering Asset Bubble?," IWH Discussion Papers 11/2008, Halle Institute for Economic Research (IWH).
    8. Orlowski, Lucjan T., 2015. "Monetary expansion and bank credit: A lack of spark," Journal of Policy Modeling, Elsevier, vol. 37(3), pages 510-520.
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    1. Orlowski, Lucjan T., 2023. "How susceptible is the European financial stability to economic policy uncertainty?," Journal of Policy Modeling, Elsevier, vol. 45(4), pages 864-875.

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