Economic Consequences of the COVID-19 crisis

Abstract

The year 2020 will be remembered as the year of the COVID-19 pandemic. The COVID-19 crisis has, by June 15, 2021, taken almost 600,000 U.S. lives and more than 3.8 million lives globally. The crisis has also imposed crushing economic hardship both in developing countries and in developed countries alike. Most developed countries, and many prominent developing countries, designed and implemented policies to contain the crisis and mitigate the economic impact. The United States stands out in the world for its inability to contain the COVID-19 virus and the economic impact is both profound and lasting. This chapter has three goals. The first goal is to describe the economic impact of the crisis with a particular focus on U.S. labor markets, low-wage workers, and workers in the restaurant industry. The second goal is to describe the implications of the pandemic on developing countries because the world is increasingly interconnected and, thus, the crisis in the U.S. has important implications for developing countries. The third goal is to describe the main policy lessons that emerge from a review of more than eighty academic papers and in-depth interviews focusing on the economic effects of the COVID-19 crisis