We are currently in the midst of the most severe economic crisis since the Great Depression. The unemployment rate has hit a record high, and the International Monetary Fund is predicting a drop in our GDP of nearly 6 percent this year. If this is purely a supply shock, then our economy should recover quickly once restrictions on economic activity are lifted. On the other hand, according to a report from the Becker Friedman Institute of the University of Chicago, 42 percent of the jobs lost so far in this crisis could be permanent losses. If that is the case, then this supply shock will turn into a demand crisis much like the Great Recession of 2008, and recovery will be much slower. With so much uncertainty, what should a strategist do?
Image: Illustration by Israel G. Vargas - https://hbr.org
