The closing numbers at the New York Stock Exchange for Monday, March 16, 2020
Bryan R. Smith/The New York Times

The global economy will go into recession this year. The downturn will be sudden and sharp. And although a constructive response from policymakers, companies, and households could limit its duration, its effects will be felt for decades to come. 

Most economic forecasts for 2020 predicted a year of steady if not rising growth. The International Monetary Fund’s January forecast update saw growth picking up from 2.9 percent in 2019 to 3.3 percent in 2020. And there were plenty of reasons to be optimistic: the “Phase One” trade agreement between China and the United States, the reduction of Brexit-related uncertainties, and strong consumer spending, especially in the United States and Germany, which seemed likely to spur companies to proceed with delayed investment plans.

Then came the novel coronavirus. With the economic shock of the health crisis spreading around the world, economists are scrambling to revise their projections. The Organization for Economic Cooperation and Development recently

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  • MOHAMED A. EL-ERIAN is Chief Economic Adviser to Allianz, President-elect of Queens’ College Cambridge, Professor of Practice at the Wharton School, and a Senior Global Fellow at the Lauder Institute.