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I think there is too much pessimism about the future path of the labour market and economy.
Yes, the labour market took a terrible hit in March and April. We will not get *all* of that back soon. But we will get *some* of it back--and soon.
Yes, the labour market took a terrible hit in March and April. We will not get *all* of that back soon. But we will get *some* of it back--and soon.
First, the caveats:
* the virus could take a turn and things get worse
* other shocks may hit our econommy and labour market
* the future is unknown!
* I'm not arguing there will be a 'V'. I am arguing it will not be an 'L'. We will not be stuck with 1/3 of people not working.
* the virus could take a turn and things get worse
* other shocks may hit our econommy and labour market
* the future is unknown!
* I'm not arguing there will be a 'V'. I am arguing it will not be an 'L'. We will not be stuck with 1/3 of people not working.
Why do I think there is too much pessimism on the future path of the labour market?
Three reasons:
* Strong progress against virus in most provs
* When opening follows virus suppression, people have confidence.
* Re-opening likely result in big job gains in--say--June/July.
Three reasons:
* Strong progress against virus in most provs
* When opening follows virus suppression, people have confidence.
* Re-opening likely result in big job gains in--say--June/July.
Why too much economic pessimism?
We are beating down the virus.
For the economy to function, people need to have confidence they won't get sick when they work/shop.
The data show we are actually making good progress *in most provs*. If this continues, the health crisis abates.
We are beating down the virus.
For the economy to function, people need to have confidence they won't get sick when they work/shop.
The data show we are actually making good progress *in most provs*. If this continues, the health crisis abates.
Why too much economic pessimism?
BC,is an example of a province that first beat down the virus then announced a cautious plan to reopen.
Will people have confidence in this plan? Survey indicates yes.
79% of BCers have confidence in our restart plan. https://twitter.com/kevinmilligan/status/1259143479801741312
BC,is an example of a province that first beat down the virus then announced a cautious plan to reopen.
Will people have confidence in this plan? Survey indicates yes.
79% of BCers have confidence in our restart plan. https://twitter.com/kevinmilligan/status/1259143479801741312
Why too much economic pessimism?
Reopening will result in quick recapture of *some* of the job losses.
Services can *partially* rebound quickly.
Dentist offices, barbers, restaurants, malls. Will they go back to 100%? No.
But neither will they stay completely shuttered.
Reopening will result in quick recapture of *some* of the job losses.
Services can *partially* rebound quickly.
Dentist offices, barbers, restaurants, malls. Will they go back to 100%? No.
But neither will they stay completely shuttered.
To conclude, this is a very scary and horrible graph.
The economic news is *not* "good" (duh). This is a horrible state for the economy to be in.
But there is good reason to believe that we will not be stuck at the bottom of this for too long. https://twitter.com/trevortombe/status/1258891906970345472
The economic news is *not* "good" (duh). This is a horrible state for the economy to be in.
But there is good reason to believe that we will not be stuck at the bottom of this for too long. https://twitter.com/trevortombe/status/1258891906970345472
What would this look like?
Well, imagine that services and retail partially reopen in June (different speed in different provinces--I know).
Then we would be looking at some kind of 'check mark' recovery.
We get back some chunk quickly; the rest is more likely slow.
Well, imagine that services and retail partially reopen in June (different speed in different provinces--I know).
Then we would be looking at some kind of 'check mark' recovery.
We get back some chunk quickly; the rest is more likely slow.
