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Understanding the K-shaped economic recovery

Author(s): Stephen Poloz

Dec 8, 2020

COVID-19 is a natural disaster of the first order. It is altering the very fabric of our society, that much is clear. Predicting how this will all turn out is, of course, very difficult. But what we can do is to help people understand the forces acting on the economy so they can make more informed personal and business decisions.

The natural response to the pandemic last spring was to shut everything down, asking people and their children to stay home. Those who could work from home did so, while essential front-line workers went about their business, proving how essential they really are. Things stabilized during the summer, but as autumn unfolded so did a second wave. Having learned a few things, governments imposed much more targeted second-round shutdowns...