Originally published March 30, 2020.
This blog post was written by Lukas Kornher and Tekalign G. Sakketa who are both senior researchers at ZEF’s Department of Economic and Technological Change, University of Bonn.
As of March 26, the novel coronavirus (COVID-19) has been reported in 176 countries worldwide with a total of more than 500,000 reported cases and a global death toll of over 20,000 according to Johns Hopkins University. Meanwhile, many advanced and developing economies including India have put their economies and societies under a complete lockdown to slow the spread of the virus and protect their health care systems. These decisions come with harmful consequences for their national as well as for the global economy. The most important blue chip stock market indices, Dow Jones and DAX, have realized the largest weekly losses since the World Financial Crisis in 1929. China’s GDP, for the first time in 50 years, has dropped in Q1-2020 by about 10%. Morgan Stanley and the Goldman Sachs Group said the US GDP could plunge by up to 30% in Q2-2020.