Huge fiscal support has safeguarded jobs and demand, but only skills and training can prevent long-term economic scarring
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Keynes famously likened the economy to a piece of string which, in recessions, could not be pushed. A better economic metaphor now is that it is like a piece of elastic. Stretch it too far and the economy becomes permanently distended – so-called hysteresis.
The stretching of the economy’s elastic in the first half of last year saw activity fall anywhere between 10% and 25% across the world. There are very few historical precedents of the economy being stretched quite so far, quite so fast.
