Market comment 2020

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A growing number of economists are also losing hope that the collapse will be followed by a swift recovery. According to one analysis by Deutsche Bank, many companies and households will at first save money to pay off debts they have accumulated in the crisis. Analysts at the bank believe this would result in the economy taking not a V shape, but a U-shaped curve, meaning the collapse will be followed by a period of stagnation before growth starts again. New York University economics expert Nouriel Roubini believes even that is optimistic. He has recently begun speaking of an "I” scenario, a vertical, nearly uninterrupted decline in the economy, without any recovery in sight. Some economists fear that the corona crisis could spell the end of American economic dominance. Harvard University’s Kenneth Rogoff argues that, even though we shouldn’t underestimate the U.S.’s ability to creatively overcome adversity, it is unclear if it will succeed this time. He says that the pandemic could "prove to be the greatest threat to U.S. leadership and primacy of the dollar since World War II."

 The American Patient: How Trump Is Fueling a Corona Disaster - DER SPIEGEL