Karen Dynan, Olivier Blanchard, and Martin Chorzempa discussed the global and regional economic impacts and policy implications of the COVID-19 pandemic at the Institute's spring 2020 semiannual Global Economic Prospects event.

Karen Dynan, nonresident senior fellow and professor of the practice in the economics department at Harvard, presented the Institute's forecast for the major economies, with a special focus on the US outlook. Her forecast, to the extent realistically possible, takes into account the damage already caused by the pandemic and prospects for recovery. Dynan highlighted key indicators to monitor and the factors that will determine the duration of the recession and the speed at which economic activity will return to normal.

Olivier Blanchard, C. Fred Bergsten Senior Fellow, discussed the present fiscal push by the larger economies, including the common framework underlying these fiscal measures and the differences in implementing them across countries. He linked fiscal stimulus policies to the outlook through the lenses of both short-term effectiveness and longer-term debt sustainability.

Martin Chorzempa, research fellow, presented his close analysis of the signs of recovery and infection containment in China and other seemingly resilient East Asian economies. He offered insights into the various policy paths taken and how those have paid off in economic terms.

The Peterson Institute held its semiannual Global Economic Prospects event on April 10 virtually for the first time. Unsurprisingly, in the age of coronavirus, global economic prospects look grim. There is hope for a "checkmark" recovery, where economic growth dips sharply then gradually rises towards the end of the year and into 2021, but Karen Dynan, the lead presenter at the event, noted that gains will be uneven as individual countries respond to virus containment and economic lockdowns.

Olivier Blanchard discussed how countries and economists will have to rewrite the fiscal guidebook to deal with the coronavirus recession. He explained the three roles of fiscal policy in advanced economies during this crisis: contain the virus (which he calls a no brainer), provide speedy disaster relief to liquidity-strapped households and firms, and—the most difficult to predict—maintain aggregate demand. The challenging part of predicting and sustaining aggregate demand is the uncertainty of what happens after the virus is at least partially contained. When lockdowns are lifted and social distancing rules relaxed, will there be pent-up demand from people who could not spend—or travel—during the lockdown? If there is a second wave of the virus, will that lead to precautionary saving by consumers and low investment by firms? Even Dr. Blanchard doesn't know. The key is for fiscal policy to be flexible.

Martin Chorzempa presented his analysis of virus containment and economic recovery in East Asian economies. The governments of Taiwan, Singapore, and South Korea responded quickly, using techniques like quickly scaled testing, contact tracing, separate quarantine facilities, and other actions to avoid a total economic shutdown. However, there have been worrying resurgences of the virus. Singapore recently instituted its first partial lockdown on April 7, and the number of local unlinked cases has been increasing. Chorzempa concluded that it is extremely difficult to contain the coronavirus at the country level while the pandemic continues to spread elsewhere, but the East Asian experience shows that with an effective government and widespread testing, the virus can be contained while keeping much of the economy—including the service industry—running.