The Covid-19 pandemic has forced experts to predict what lies ahead as economies gradually start to re-open.
However, the economic forecasts made by economists using known models may not be relevant in the current scenario, as these models do not take into account the unpredictable changes brought by the pandemic.
Branko Milanovic, an economist, shared his article on how the Covid-19 pandemic has brought unpredictable social and political changes to the world. Economists use models that consider an economy as a self-contained system that is vulnerable to economic shocks.
The current pandemic, however, has aggravated several social and political changes such as the trade war between the US and China, and the protests against racism in the US.
The pandemic also presents a number of unknown challenges, such as the possibility of a second wave and its impact on countries.
In such a situation, any economic models may not closely predict the future of the global economy.