Economic impacts of the COVID-19 pandemic: State perspectives

Hewings, Geoffrey J.D.; Kriz, Kenneth; Merriman, David F.

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https://hdl.handle.net/2142/110192 Copy

Description

Title

Economic impacts of the COVID-19 pandemic: State perspectives

Author(s)

• Hewings, Geoffrey J.D.
• Kriz, Kenneth
• Merriman, David F.

Issue Date

2020-05-27

Keyword(s)

• economic
• pandemic
• fiscal
• covid
• research
• health
• public
• perspectives

Abstract

The economic disruption associated with the COVID-19 pandemic came on suddenly and is quite severe. Because much economic data lags actual events by weeks or months, it is still too early to have a complete picture of the economic damage from the first wave of the pandemic, but we can begin the analysis. We know that the recession has already caused a nearly unprecedented rise in the level of unemployment and that Illinois experienced an economic shock that parallels the national economic shock. This is unlike the Great Recession of 2007-2009, when the recession evolved slowly and Illinois entered the recession after most of the Midwest and the U.S. However, like past recessions, Illinois may see a smaller decline and perhaps even increases in some sectors. For example, it is quite possible that, despite the recession, many new businesses will be launched as the newly unemployed find creative ways to start new businesses. Although the economic disruption from the pandemic is highly concentrated in a few key sectors (Trade and Transportation, Professional and Business Services, and Leisure and Hospitality), our economic model forecasts that the disruption will spread through Illinois’ highly interconnected economy. The model estimates that each job lost directly to the recession will trigger about 0.38 additional job losses in connected industries. Recovery efforts will be challenged by this economic inter-connectedness. Even if public health conditions allow some businesses to be brought online, they will not be able to succeed unless upstream suppliers can provide business inputs and downstream customers feel comfortable with engaging in economic activity.

Publisher

Institute of Government & Public Affairs

Type of Resource

text

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http://hdl.handle.net/2142/110192

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