5 May

Harvard University professor Jeffrey Frankel has warned against a so called W recession that could happen if global leaders lift restrictions too soon and declare victory over the virus.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

He said that historical data from the 1918 epidemic suggests that ending lockdowns too quickly could bring about a deadlier second wave.

He also warned that political leaders might also abandon economic stimulus too soon – the second mistake that could lead to a W-shaped recession.

He said: “US policymakers made a similar blunder after the 2008 global financial crisis. President Barack Obama’s fiscal stimulus program, enacted in February 2009, together with the Fed’s monetary expansion, halted the economy’s free fall.

“The recovery began in June of that year. But in 2011, after Republicans took control of the US Congress, the fiscal stimulus was prematurely ended, impeding the recovery considerably.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

However, J.P.Morgan Asset Management still predicts a U shaped recession for the US and says the decline in real GDP growth in Q1 is consistent with their forecast of a U-shaped recession, or a fall, a stall and a surge.

Meanwhile, McKinsey described five qualities that will be critical for business leaders to find their way to the post Covid-19 new normal : resolve, resilience, return, reimagination, and reform. With some of these likely to overlap and differ based on sector and country.

The consulting firm also said there are four strategic areas to focus on: recovering revenue, rebuilding operations, rethinking the organisation, and accelerating the adoption of digital solutions.

McKinsey also called on companies to act with urgency: During the current crisis, businesses have worked faster and better than they dreamed possible just a few months ago.

Maintaining that sense of possibility will be an enduring source of competitive advantage.