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Risk of Rapid Re-opening

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TweetMay 11, 2020 — This interview by Associated Press is the basis of quotes in a story today: “Risk of reopening US economy too fast: A W-shaped recovery.” AP: To what extent is the push to reopen the economy making a W-shaped recovery more likely? JF: I believe that the push to reopen the economy is making a W-shaped recovery very much more likely. AP: What should we be doing to produce the best economic outcome? JF: Widespread reopening should wait for certain conditions to be met.  The conditions include: a sustained decline in mortality rates (not just the attainment of a peak); the easy availability of frequent testing (in reality, not just as a White House claim); and perhaps ultimately the discovery and testing of a vaccine and/or treatment (which will take time). AP: At this

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May 11, 2020 — This interview by Associated Press is the basis of quotes in a story today: “Risk of reopening US economy too fast: A W-shaped recovery.

  1. AP: To what extent is the push to reopen the economy making a W-shaped recovery more likely?

JF: I believe that the push to reopen the economy is making a W-shaped recovery very much more likely.

  1. AP: What should we be doing to produce the best economic outcome?

JF: Widespread reopening should wait for certain conditions to be met.  The conditions include:

  • a sustained decline in mortality rates (not just the attainment of a peak);
  • the easy availability of frequent testing (in reality, not just as a White House claim);
  • and perhaps ultimately the discovery and testing of a vaccine and/or treatment (which will take time).
  1. AP: At this point what type of recovery do you see as most likely?

JF: Unfortunately, I would guess that a W-shaped pattern is the most likely, as premature withdrawal of government measures leads to relapses in health of the population and health of the economy.

Jeffrey Frankel
Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government, previously served as a member of President Bill Clinton’s Council of Economic Advisers. He directs the Program in International Finance and Macroeconomics at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery.

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