Will the COVID crisis give way to a rapid normalisation of the economy or a disastrous situation instead?

Two theories are circulating: That economies will normalise rapidly. This argument is based on the observation of their resilience: once the health restrictions are lifted, demand and activity very quickly get going again; That economic disaster awaits, due to the rise in unemployment because economic sectors have contracted and will have to reduce employment and it will be very difficult to retrain workers; due to the deterioration in corporate balance sheets (fall in earnings and in equity, indebtedness), which will lead to bankruptcies and to weak investment; and due to the disruption of young people’s education, which will lead them to experience problems finding work. The reality may be between the two: production will certainly rebound rapidly once the health restrictions are lifted; but at the same time, structural unemployment will rise, structural youth unemployment will rise sharply and potential growth will be reduced by the deterioration in companies’ financial situation.