Gita Gopinath. Photo: theprint.in
By Isaac Cohen*
The Research Department Director of the International Monetary Fund, Gita Gopinath recently told The Wall Street Journal (12/14/20) “the world economy is recovering,” but “the fourth quarter of this year and the first quarter of next year will come in somewhat weaker than many expected.” Additionally, Ms. Gopinath recognized the recovery is shaped as a “K,” because the uneven distribution of benefits has hit hardest among low-skilled, women and young workers. Meanwhile, developing and emerging economies, excepting China, are “being hit much harder than advanced economies” and even vaccination will be slower among the less advanced. Therefore, Ms. Gopinath concluded, “a K-shaped recovery is the big challenge of 2021.”
The Nobel Prize winner in economics and New York Times columnist Paul Krugman (11/20/20) agrees that, in the United States before vaccinations take effect, the slowdown in job growth and even job losses may continue in the coming quarters. Further down, however, as the pandemic subsides, Krugman by 2022 foresees a “Biden Boom,” since there is “probably a lot of pent-up demand.” Those who remained employed, Krugman says, saved during the lockdowns and stay at home mandates, “accumulating a lot of liquid assets.” For these reasons, Krugman says he is “optimistic about the immediate outlook for a post-vaccine economy.”
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, TELEMUNDO, UNIVISION and other media.
