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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Long recession, secular stagnation, pandemic, long cycles, institutional changes, disruptive innovations
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches; D - Microeconomics > D3 - Distribution > D33 - Factor Income Distribution; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N12 - U.S. ; Canada: 1913-; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O51 - U.S. ; Canada

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