Munich Personal RePEc Archive

The Long Recession and Economic Consequences of the COVID-19 Pandemic

Tsoulfidis, Lefteris and Tsaliki, Persefoni (2021): The Long Recession and Economic Consequences of the COVID-19 Pandemic.

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Abstract

In this article, we argue the rate of profit in combination with the movement of the real net profits determines the phase-change of the economy in its long cyclical pattern. Since WWII, the US and the world economy have experienced two such long cycles. The pandemic COVID-19 has deepened a recession that has been already underway since 2007. The growth rates in the first post-pandemic years are expected to be high; however, soon after, the economies will find themselves back to their old recessionary growth paths. The onset of a new long cycle requires the restoration of profitability, which can be sustained only through the introduction of ‘disruptive’ innovations backed by suitable institutional arrangements.

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