Abstract
The lasting economic impact of the coronavirus pandemic will become apparent in the development of the macroeconomic factors of production — labour, capital, human capital as well as the stock of technical knowledge. Changes in behaviour such as a greater acceptance of technology can strengthen potential output permanently. By contrast, negative effects may arise from growing protectionist attitudes or long-lasting uncertainties and ‘scarring effects’. In any case, the coronavirus crisis has induced a technology push. This may be intensified if digitisation gains additional support from investments in infrastructure or if the pandemic heralds a renaissance in the natural sciences — with a corresponding impact on human and physical capital as well as on technical knowledge. For the time being, it is unclear what effects the restructuring and secular structural change will have on potential output. However, dangers are lurking in the acceleration of geopolitical tensions, a misunderstanding of technological sovereignty and increasing government interventions, which, as a whole, could hamper innovation and investment.
Highlights
The lasting economic impact of the coronavirus pandemic will become apparent in the development of the macroeconomic factors of production – labour, capital, human capital as well as the stock of technical knowledge
Some potential implications for advanced economies are discussed, focusing primarily on the effects that the COVID-19 pandemic could have on macroeconomic potential output
The production potential can be described in terms of the endowment of an economy with labour, physical capital, human capital, natural capital and the diverse stock of technical knowledge
Summary
The lasting economic impact of the coronavirus pandemic will become apparent in the development of the macroeconomic factors of production – labour, capital, human capital as well as the stock of technical knowledge Changes in behaviour such as a greater acceptance of technology can strengthen potential output permanently. The coronavirus crisis will affect public finances (Gros, 2020) and the distribution of income and wealth In this context, the question arises of how inclusive the structural change that could be triggered by the pandemic may be for the various socio-economic groups in society (Grömling and KIös, 2019; Eichhorst et al, 2020). The propensity to invest in all these factors is governed by the institutional and geopolitical framework
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