COVID-19

Which countries’ economies are doing best? Those that beat the virus.

Mitchell Hartman Dec 14, 2020
Heard on:
HTML EMBED:
COPY
This year, the U.S. has added instability to the global economy, in contrast to its historical role of bolstering recovery. Kena Betancur/AFP via Getty Images
COVID-19

Which countries’ economies are doing best? Those that beat the virus.

Mitchell Hartman Dec 14, 2020
Heard on:
This year, the U.S. has added instability to the global economy, in contrast to its historical role of bolstering recovery. Kena Betancur/AFP via Getty Images
HTML EMBED:
COPY

This week, on Tuesday and Wednesday, the Federal Reserve’s Open Market Committee meets for the last time this year, and the last time during Donald Trump’s presidency.

It’s tough to try to set interest rates, stimulate growth and protect the fragile recovery in the middle of a pandemic surge — with no relief bill in sight.

The thing is, the U.S. is not alone: Recovery’s going to be tough in a lot of places, even as COVID-19 vaccines start to roll out.

In addition to the Fed, this week central banks in the U.K., China, Japan and a host of other countries are also meeting. In some of those economies, the recovery is going better than it is here.

A global economy is usually a multifaceted thing. But in the pandemic, a single unifying principle applies, said Cornell economist Eswar Prasad.

“Countries that have done a better job at managing the virus do seem to be doing better in terms of economic recoveries,” Prasad said.

The evidence: much of Asia. China, for example, says it’s largely banished the coronavirus.

“China’s recovery seems to be well-entrenched, and it’s now in the position of being by far the leading contributor to what little global growth there is likely to be this year,” Prasad said.

Contrast that with India and Russia, where there’s more COVID and less recovery.

That’s a lot like the U.S., said Adam Posen at the Peterson Institute for International Economics.

“The drag on the U.S. economy is really provoked by the disease,” Posen said. And the lack of new relief spending.

In Europe, overall, fiscal and public health policies have been more effective. The cloud on the horizon, said Columbia Law professor Anu Bradford, is that the U.K. might crash out of the European Union without a deal by year’s end.

“The economic consequences of a ‘no deal’ are devastating,” Bradford said. “They are very bad for the EU, but even more so for the U.K.”

The U.S. has historically been a net contributor to global recovery after economic crises. But Posen at the Peterson Institute said mostly what the U.S. is contributing this time around is instability.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

Read More

Collapse

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.