Variables including the US’s public health response, bankruptcy rates, job loss, and the government’s policy response make for a wide range of possibilities, McKinsey said in the March report. Though it’s human nature “to freeze, or to jump to a simple answer,” the team looked to “bound the uncertainty with reason” and put forth a wide range of futures that will evolve alongside the pandemic.
“Two things are reasonably certain: If we do not stop the virus, many people will die. If our attempts to stop the pandemic severely damage our economies, it is hard to envision how there will not be even more suffering ahead,” McKinsey said.
The firm currently expects one of four more optimistic scenarios to take place, with COVID-19’s spread controlled and “catastrophic structural economic damage avoided.” The outcomes range from sharp V-shaped recoveries to turbulent U-shaped trends, as global output slides to historic lows before activity swiftly returns to past norms.
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