Global Economic Prospects: Fall 2020

In light of the COVID-19 pandemic, PIIE experts Karen Dynan, Jason Furman, and David Wilcox focused on the puzzles and surprises in outcomes in the United States and the European Union, implications of the crisis for potential output and income distribution, and role for fiscal policy at the Institute's fall 2020 semiannual Global Economic Prospects event.

Karen Dynan, nonresident senior fellow at PIIE and professor of the practice jointly at the Harvard Kennedy School and the Department of Economics at Harvard, presented PIIE's forecast for the major economies, with special focus on the US outlook. Her discussion explored the effects of the pandemic on potential output and the output gap, including both temporary disruptions and persistent effects arising from the scarring of households and businesses.

Jason Furman, nonresident senior fellow at PIIE and professor of the practice of economic policy jointly at the Harvard Kennedy School and the Department of Economics at Harvard, discussed the surprises that have arisen in the response to stimulus policy and spread of the disease, including comparisons between EU and US policy impacts. He also addressed what difference the congressional deadlock over a second CARES Act or other additional stimulus could make to the outlook and what fiscal policy is likely to follow the US presidential election.

David Wilcox, nonresident senior fellow at PIIE and formerly director of the Division of Research and Statistics at the Federal Reserve Board, discussed ways in which different groups in the United States have been experiencing the pandemic differently from one another and contrasted the current experience to historical norms. He drew out the implications of the distributional divide for the economic outlook.