From macro to micro: the economics of coronavirus

Beyond the macro shock, Covid-19 will transform firm, sector, & labour market dynamics

Welcome to small world, a new series of insights on the global economy from a small advanced economy perspective.  Read to the end of the note for my chart of the week, and a summary of interesting developments from around the world.

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From macro to micro: the economics of coronavirus

GDP data around the world was the worst on record in Q2.  Even Australia, which got through the global financial crisis with only one quarter of slightly negative GDP growth, contracted by 7.0% qoq in Q2, entering recession for the first time since 1991.  And this was one of the better Q2 GDP readings across larger advanced economies.

Looking forward, there are some positive signs in the global economy.  World trade growth looks to be recovering, PMI readings are largely in expansionary territory, and domestic traffic measures are increasin…