If the health crisis vanished, what would prevent the economy from becoming the same as before?
Let us assume that the COVID epidemic vanished entirely, and therefore so did the related health standards and precautions. What would prevent the economy from normalising and becoming the same as before? First, there would be all the “stock effects†modified by the crisis: The higher stock of corporate debt, stopping companies from investing; The higher stock of money, leading to asset price bubbles. There would also be the changes brought about by the crisis among manufacturers (return to regional value chains), in the organisation of labour (the share of remote working), in consumer behaviour (the share of e-commerce) and in the importance given to the climate and the environment. Last, there may also be precautionary behaviours induced by the prospect of other health crises erupting in the future.