Abstract
Research background: The increasing global economic decrease that got the name of Great Lockdown had world pandemic as its trigger. It is already obvious that by its depth, breadth and the number of economics included this recession can be compared to the Great Depression. Shocks nature influences a lot on the structural changes during the recession. The tertiary sector industries, which development is determined by globalization and that are typical for post-industrial economies have the heaviest losses. Now it is impossible to predict are the de-globalization processes permanent or just temporary and which changes in sectoral structure will stay with us after the COVID-19 pandemic. The period of sharp drop is finishing now and it’s obvious that the specific nature of current recession will reveal itself during the market adjustment to the new conditions. Purpose of the article: is to highlight the specific features of recession caused by COVID-19 pandemic, distinguishing it from the previous global recessions. Methods: this article research is based on comparative analysis of main macroeconomic variables trends during the global recessions. Findings & Value added: Current global recession specific features highlited in this article are: industries with a high share of employment are subject to the greatest compression; the economic recession took its origin as a result of the supply shock, and it has a clearly defined industry specifics. The growing uncertainty is limiting the recovery growth potential.; Keynesian measures of countercyclical regulation appeared to be ineffective during the release restrictions phase.
Highlights
The contraction of the world economy in the second quarter of 2020 may become the beginning of a global economic crisis comparable to – or greater than – the Great Depression
The new crisis was triggered by the event of non-economic nature, by a global pandemic, and to be more precise - the actions of the Governments aimed at limiting its spread
It is important to note that the current crisis has a number of quite specific features that complicate prognostication of its course and require special measures in the economic policy
Summary
The contraction of the world economy in the second quarter of 2020 may become the beginning of a global economic crisis comparable to – or greater than – the Great Depression. The new crisis was triggered by the event of non-economic nature, by a global pandemic, and to be more precise - the actions of the Governments aimed at limiting its spread. The output reduction is caused not by the aggregate demand changes, but by the external constraints of non-market nature. The rate of recovery after lifting the bans will depend crucially on the adequacy of stabilization policies in relation to the economic conditions that have taken shape during the quarantine. It is important to note that the current crisis has a number of quite specific features that complicate prognostication of its course and require special measures in the economic policy
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