Chaired by Graeme Roy
Chaired by Graeme Roy
The coronavirus outbreak has already led to a sharp economic downturn in Scotland; one that will undoubtedly change the shape of our economy in the long-run, according to the Fraser of Allander Institute.
In its latest Economic Commentary, the Institute says the virus outbreak represents an ‘unprecedented shock’ to the global economy that will trigger a recession, but that the collective efforts of business and policymakers is to ensure that this is – as much as possible – a ‘v-shaped’ recession, with activity picking-up once the public health crisis passes.
As we move into the next phase of the crisis, the government have responded by effectively putting the country on partial ‘lockdown’ with all but essential activity prohibited.
As we pointed out last week, the stronger the public health response, the greater the shutdown required to our day-to-day economic activity.
Of course, there is no trade-off between protecting people’s lives and the economy. But the challenges now facing our economy are huge. This is why the Chancellor’s response last week was so significant. Not only will the measures help protect livelihoods in the short-term, but they will also help support the recovery.
However, even with these measures we are already seeing firms shutting up shop for the last time. And it seems inconceivable that current events will not have a long-term impact upon our economy.
There has already been a great deal of commentary about the impact that the COVID-19 pandemic could have on jobs and businesses.
These impacts are already significant. And whilst the root cause of the economic ‘shock’ will be temporary, some of the consequences for our economy could be long-lasting.
Whilst, quite rightly, public health is the primary concern for policy makers right now, we have also seen wide ranging economic measures from the Chancellor to act as a bridge for individuals and businesses to get through this difficult time. The aim of these measures is to not only support families and businesses in the short-term, but to invest in the long-term future of the economy for once we are through this.
However, it is also likely that the impacts will not be evenly spread across different sectors of the economy or different types of employment. This will mean that particular areas of Scotland, where particular industries or ways of working dominate, may be more vulnerable to experiencing long-term impacts.
In this blog, we explore the potential differential regional impacts for communities in Scotland.
Dr Alex Dickson, Reader in Economics, University of Strathclyde
OK folks, so this is why people should follow the Government’s advice on ‘social distancing’ in light of the spread of Covid-19.
In this blog, I’ll set out why economic theory tells us to listen carefully to what the government is telling us.