Enter The Tilde? Rising Covid-19 Fatalities And State GDP In Question

Menzie Chinn
By Menzie Chinn of Econbrowser
Professor of Public Affairs and Economics at the University of Wisconsin •

Whether the shutdowns induce a “W”, a “tilde”, or just a more prolonged swoosh remains to be seen. The shift to a more upbeat outlook going from May to June might be reversed should lockdowns be reimposed.

From Goldman-Sachs today:

Source: Goldman-Sachs, “Global Economics Comment: Tracking Coronavirus,” June 13, 2020.

Now consider fatality rates, since several governors seem blithely unconcerned about rising cases. From FT:

Source: FT, “Coronavirus tracked,” accessed June 13, 2020.

Oregon has already put a pause on further re-opening. These states accounted for 22.4% of US GDP in 2019. The shift to a more upbeat outlook going from May to June might be reversed should lockdowns be reimposed.

Figure 1: GDP, bn. Ch.2012$ SAAR (black), mean, from WSJ May survey (teal), and from WSJ June survey (blue). Source: BEA, WSJ.

Whether the shutdowns induce a “W”, a “tilde”, or just a more prolonged swoosh remains to be seen.

Disclosure:

None.

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