The post-COVID-19 era deserves to be called the era of the gre | Valdai Discussion Club

The post-COVID-19 era deserves to be called the era of the great divergence.

The global economy is rapidly recovering. After lockdown measures by nations across the world led to the most dismal performance to date in 2Q 2020, economic activity is being resumed and we are seeing a rapid turnaround in almost all sectors except for some services trade and domestic small enterprises.

The pace of strong recovery is exceeding “expectations.” But does this mean we are entering an unforeseeable situation?

A stronger rebound than expected can of course lead to worries of inflation. There are even concerns that spread of the Delta variant will cause stagflation. These analyses are valid. However, a clearer understanding of the nature of this economic recession could lead to different judgments of the possibility of inflation.

The gap between different income groups, genders, and levels of human capital accumulation has grown further, while economic inequality and in terms of non-traditional security threats has dramatically worsened. This expansion of inequality will be the largest obstacle to sustainable development, writes Kim Heungchong, President of the Korea Institute for International Economic Policy (KIEP).

The article is published as part of the Valdai Club’s Think Tank project, continuing the collaboration between Valdai and the Korea Institute for International Economic Policy.

https://valdaiclub.com/a/highlights/the-great-covid-19-recession-revisited-hysteresis-/