Economists Are Split on the Shape of the Economic Recovery

April 9, 2020

Everyone acknowledges that the coronavirus has led to a severe decline in economic activity. What there is less consensus on is what the recovery will look like. The most recent Wall Street Journal economist survey found that the 70 business and academic economists who make up their panel were roughly split on the shape of the recovery.

The general consensus is that the recovery will be either V-shaped or U-shaped. 47% expect a V-shape, where a sharp drop is followed by a sharp rebound. 45% expect the recovery will be U-shaped, with a prolonged bottom and more gradual rebound. Just 4% expect a W-shape, where there are two sharp declines, or an L-shape, where there is no recovery in the foreseeable future.

The good news is that the economists overwhelmingly expect the downturn to be short, with 85% anticipating the recovery to begin in either the third or fourth quarter of 2020.

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