What we know and don’t know about COVID-19 and the economy
Today’s Owl is a brief summary of a recent webinar presentation by ATB Financial’s Chief Economist Todd Hirsch on COVID-19 and the Alberta economy.
By ATB Economics 6 April 2020 2 min read
We could argue for days about whether the ancient Greek philosopher Socrates actually said “I know that I know nothing” and not be any wiser. The insight embedded in the saying is, however, extremely wise—we need to be aware of what we don’t know about a subject. This is very much the case when it comes to the economic implications of COVID-19.
We know we are in the midst of an unprecedented event. There are parallels to the Spanish Flu of 1918-20, the SARS outbreak of 2002-04 and the global financial crisis of 2007-08, but none of these are sufficient guides to what is happening now. We are learning as we go.
We also know that our governments and the Bank of Canada are taking some extraordinary measures to provide economic assistance to people and businesses, but we don’t know how effective these will be, especially when it comes to the most vulnerable members of our communities.
And while we can say with some assurance that the pandemic will subside, when this will be, when government directives on containment will end, how long people will comply with those directives, and if we will need to batten down the hatches all over again in response to a second wave of the virus are all unknown.
We also can’t assume that everything will, in time, get back to normal. From handshakes to business travel and sporting events to international supply chains, the post-pandemic world might be quite different from the one that we left behind just a few short weeks ago.
That all sounds rather gloomy. But we will adapt to the new normal and this will create opportunities for those ready to seize them.
It would be a tremendous setback for both humanity and the economy if protectionism and xenophobia are allowed to carry the day, but we might be able to emerge from the pandemic with a deeper appreciation of, and stronger economic connections to, our local communities.
There will also be opportunities in areas like pandemic preparedness, connecting people electronically, global logistics, and solving the “last mile problem” associated with delivering goods and services safely and efficiently to people in their homes.
A note on COVID-19: The COVID-19 pandemic is having a major impact on the economy here in Alberta and around the world. The Owl will report on these impacts when good information is available while continuing to track regularly scheduled releases of economic data and long-term trends.