The pandemic witnessed ravaged economies across the world. Though rarely pleasant, troughs and peaks are a normal part of the business cycle that all free-run economies run. How each of these economies will recover from the coronavirus effect is a matter of debate.
Restricted travel, shuttered non-essential businesses and universal social distancing policies has severed the flow of goods and people, stalled economies and has been under the effect of severe economic consequences globally. It startled the world with its ferocity building an economic chaos at an accelerating pace. Consumer sentiment has hit an all-time low. Everyone is anxious about jobs, health and finances.
Then where is the silver lining? – That the economy will recover, at some point. But how does the economic recovery process look like? Expert economists are using new ways, to describe the current situation through alphabets. Economic recovery after a recession can come in five different shapes - V, U, L, W and K. Not necessarily official, as there's no formal system for classifying recessions or their aftermath. Rather, the letter-naming first took off during a turn-of-the-21st-century recession as a short-hand to describe predictions of how the economy might recover.
Explore this module to dive deep into what each letter means for the state of the economy.