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Opinion
Tyler Cowen

The U.S. Economy Is Now in Uncharted Waters

Why it’s so hard to design an economic response to the coronavirus. 

Could there be fewer subway cars in New York City’s future? 

Could there be fewer subway cars in New York City’s future? 

Photographer: Victor J. Blue/Bloomberg

How bad Covid-19 will be for the U.S. economy is almost impossible to say, since there are few precedents to look to. By considering two extreme scenarios, however, it is possible to get a sense of what the issues are.

First, consider the relatively optimistic view: Covid-19 will have effects akin to what economists call a seasonal business cycle — which is to say, it will be over quickly and without much lasting damage.