What will be the lasting effects of the coronavirus on the economy and financial markets?

Every lasting effect of the coronavirus crisis on the economy is associated with a lasting effect on financial markets: Permanent loss of growth (due to the decline in investment and therefore in capital stock, due to corporate defaults), leading to falling share prices and commodity prices; Increasing corporate debt, to offset companies’ loss of revenues, leading to a widening of credit spreads (amplified in the United States by the deterioration in the situation of independent oil companies as a result of the fall in oil prices); Rising public debt, due to the rise in fiscal deficits during the crisis, leading to a widening of spreads on peripheral government bonds in the euro zone; Monetary policies that on the one hand are more expansionary due to the higher public debt and the decline in growth, but on the other hand are more restrictive if the loss of growth is due to a decline in the supply of goods and services and is therefore associated with higher inflation, thereby making the total effect on monetary policy ambiguous.