Graphics by Jasmine (Misani)

Once a COVID-19 vaccine is found, our lives can return to normal, right? Economists don’t think so.

Even if the vast majority of the population is immune to the coronavirus tomorrow, leading economists believe that it may take six months or more to bring the economy back to pre-pandemic levels. Moreover, if a small number of people are immunized, economists believe that it may take more than a year to normalize the economy.

in This week our Periodic survey of quantitative macroeconomists,versus Global Market Initiative At the University of Chicago Booth School of Business, we asked the expert group to close their eyes and imagine that a part of the population (25%, 50% or 75%) was suddenly immune to COVID-19. Under each of the above hypothetical scenarios, how long will it take to recover the GDP before the pandemic (from the fourth quarter of 2019)?

As you can see, changes in immunity levels make a big difference in economists’ assessment of the speed of recovery. The 32 economists who completed the survey jointly predicted that if 25% of the population is suddenly immune to COVID-19, by the end of June 2021, there is only a 30% chance that GDP will return to its pre-pandemic level.

But for a universe where 75% of the population is immediately immune to COVID-19, their predictions are much brighter: Economists believe that, on average, by 2016, GDP may return to pre-pandemic levels. Sex is 56% in the middle of next year.

However, even the consensus forecast for the worst case scenario (which may actually take months or years to emerge) is not so optimistic. In this fantasy world, 75% of Americans will wake up tomorrow and be able to resist the coronavirus. Economists believe that by the end of 2020, there is only 15% chance of GDP returning to pre-pandemic levels, and only 35% to At the end of the first quarter of 2021, the probability of GDP reaching this level is %.

In other words, vaccines are not an economic panacea.

“It is important to remember that although the pandemic is the beginning of the entire recession, even if we gain broad immunity, it will take some time to recover.” Tara Sinclair, Economist at George Washington University. “This does not mean that people will immediately return to normal economic life.”

Sinclair and others believe that the problem is that the economy has suffered so much damage, even if the virus threat starts to fade, it will be difficult to rebound quickly. Millions of workers are unemployed,countless Business closedFor many people, the rhythm of work life May have been permanently changed. All of this helps explain why even under unrealistically optimistic circumstances, most of the threat of COVID-19 disappeared overnight, and a rapid economic recovery may not follow immediately.

Not all economists in the survey are as pessimistic as Sinclair. If most Americans are suddenly immune to COVID-19, the virus may be contained relatively quickly, and most people will be eager to return to normal economic conditions. Gloria Gonzalez-Rivera, Is a professor of economics at the University of California, Riverside. She believes that under such circumstances, consumers will be eager to postpone vacations and return to their favorite restaurants. As a result, declining industries such as hospitality and tourism will be able to recover quickly. Gonzalez Rivera said: “We have a huge pent-up demand, and curbing the virus will be the catalyst for releasing this demand.”

but Jonathan WrightAn economist at Johns Hopkins University has been consulting with FiveThirtyEight to design a survey. He told us that although some consumers may be eager to spend, it will take a long time for the economy to return to normal after a recession. He said: “Whenever people are no longer trapped at home, they will not necessarily spend lavishly. I certainly don’t want companies to have this impulse.” “After the economic recession, business investment is usually diluted. I Don’t want this to be an exception.” For example, this means that if a company that manages to survive the crisis is unwilling or unable to quickly expand to pre-recession levels, it may take a while for unemployed workers to find new jobs.

Optimism about GDP recovery is growing

However, this is not bad news. In a general sense, over time, economists have gradually become more and more optimistic about the economy.since Last time we asked, On August 10th, their average forecast for the third quarter GDP annual average growth has been raised from + 12.2% to + 15.4%, the most optimistic scenario is optimistic, the worst scenario is pessimistic. In this week’s survey, their forecast for the fourth quarter’s annual GDP growth rate is +5.8%, which is easily the highest forecast for the time period (since June 8) when we asked this question:

Allan TimmermannAn economist at the University of California, San Diego, also negotiated with FiveThirtyEight in the survey. He believes that the economist’s GDP growth forecast is small, but it is worth noting. For him, this shows that economists believe that the worst period of the crisis has passed, or they believe that if the economy starts to slow again, the government will step in.

In terms of employment, economists also believe that Initial weekly unemployment insurance claim At least one week will fall below 700,000, in other words, return to a relatively low level Normal numbers before the coronavirus -From now to November, they will return to the level of more than 1.5 million. From March 21 to June 13, they will sit there every week.

What will happen to weekly unemployment at the end of summer?

According to our survey of economists, from now to the end of October, the possibility of applying for the first unemployment insurance benefits each week will fall within various ranges

The initial weekly claim will be…	possibility
<700,000 for at least 1 week	33%
Between 700,000 and 1.5 million per week	50
> 1.5 million for at least one week	18 years old

That is good news. However, economists gave a 50% probability that monthly claims in the next few months will linger between 700,000 and 1.5 million. This actually puts the work in the United States in a stable state: unlike the early days of the pandemic. The loss of work is so terrible, but it is far from real recovery.

What will change economic expectations

We asked our survey team what factors might make their prospects better or worse than the median forecast they gave us in the survey by the end of the year. Most of the proposals we have provided for the November election did not make them very different from existing forecasts. They are more likely to believe that if Trump wins the second term and maintains control of Congress, the GDP growth in the fourth quarter will be lower than that of Biden winning the White House and the Democrats winning the control of the Senate and the President. They also believe that the results of elections deemed illegal by most countries may drag down GDP.

What makes the economy look better (or worse)?

Economists say that certain conditions will increase or decrease the average probability of GDP growth forecasts for the fourth quarter

	In this case, the GDP growth in the fourth quarter will be…
Imagine	Greatly reduced	almost	Substantially higher
Vaccines approved on election day	<1%	50%	50%
K-12 schools remain open	9	50	41
Democrats control the White House and Congress	3	81	16
Biden wins; Congress stays the same	3	91	6
Virtual teaching in K-12 schools	19	81	<1
Trump wins; Congress stays the same	twenty two	78	<1
The election is considered illegal	28 years old	72	<1
No extra stimulation	75	19	6

But compared with other possible factors, the impact of elections is relatively small.The downside is that economists Still believe The federal government’s continued lack of additional stimulus funds will severely damage the economy. (You can read information about all the reasons, Almost every instalment Our investigation).

On the bright side, they believe that if K-12 schools reopen before October and continue face-to-face learning, this may indicate that the virus may be contained enough to improve other areas of the economy. At the same time, if the FDA approves the COVID-19 vaccine before election day, they believe that the probability that GDP growth is much better than current expectations is 50%.

For political fans, it seems surprising that major events such as the presidential election will have a much smaller expected impact on the economy than the reopening of the presidential election or the passing of additional stimulus measures by Congress. Sinclair said part of the problem is that if the election has an impact on the economy, it may not happen immediately. But she said that, in general, the next president may be powerless to change the country’s economic development course, especially if the House of Representatives and the Senate maintain their differences.

She said: “Economists believe that the president does not have a strong power to directly control economic growth.” After all, it is Congress that decides how to use the country’s money. Although this may be different in a recession caused by a pandemic, it is difficult to predict which of the rotating presidency Congress will bring the better growth numbers. She said: “In the eyes of these two different candidates, the economy behaves differently-no doubt.” But in terms of quantity, will one country obviously produce better GDP data than the other? I am not sure. “

Some of these scenes give you an idea of ??better-than-expected conditions in late summer and early fall.But this also tells economists as long as After being quickly approved, the vaccine brought a significant 50% improvement in the economy. This is consistent with our previous findings on the relationship between immunity and economic recovery: Yes, it is best to use effective vaccines early. However, even after the root cause (the virus itself) has subsided, it will still take a long time to eliminate the destruction of this decline.