Economic policy in a pandemic: the experience gained in 2020—2021

The coronavirus pandemic that the world was first faced with in late 2019 and early 2020 presented a key challenge to socioeconomic and political development across the majority of developed and developing countries. Over the recent decades, and perhaps even the entire postwar period (since 1945), it became the most powerful shock for the global economy. The shrinkage, in 2020, of global GDP by 3.4% was significantly greater than that observed during the acute phase of the 2009 crisis (by 1.3%). Over the entire period after World War II, there were only two episodes when global GDP demonstrated negative dynamics, in 2009 and 2020. Next comes the slowdown in 1982, when that indicator was still on the rise, but it gained just 0.41%. Although the crisis caused by the pandemic was initially triggered by non- economic factors, its economic consequences were very significant. The pandemic produced some huge macroeconomic and structural shifts. However, for an adequate assessment of these shifts, they should be analyzed in the context of more general trends, including the structural crisis of 2008—2009; in our opinion, that crisis was at the time just checked, but by no means overcome. In fact, the world was then faced with a structural crisis that was not followed by structural reforms, because the governments of the world’s leading countries managed to “pay off” (that is, to mitigate its consequences at the cost of avoiding “creative destruction” (the term suggested by J. Schumpeter1). The upshot was a decade of low growth and stunted globalization, unprecedented increases in budget deficits and central bank balance sheets, and exceptionally low inflation. All these phenomena taken together were later described by the terms “new normal” and “long-term stagnation”.