Question

The last recession, 2008 to 2009 was labeled a U shaped. A long slog. Clinton deregulated banks and when people are allowed to gamble with other people’s money, bad things happen. The housing market absolutely formed a bubble and the bubble burst. Lots of people lost lots of money and a lot of people associated with the construction lost their means of income. Exacerbating the conditions was the fact that those still with jobs raised their saving rate further dropping aggregate demand.

Question, what will be the shape of our future recovery? Try to be detail as much as you can

Answer 1

The last recession of 2008 was a U shaped recovery. In this recovery, initially there is recession in the economy, it becomes severe and then the economy starts to recover. Looking at the present economic conditions of the world it is not possible to have sureity about the shape of recovery. Different countries will follow different recovery shape and path depending upon the severity of COVID-19 pandemic. Some countries where the pandemic is not so severe will have U shaped recovery. However, countries such as China which might recover quickly will have V shaped recovery. Some countries might have to extend the lockdown long enough with high and strong rules and regulations. These countries would be the worst case scenarios and would have L shaped recovery.