The recent spike in COVID-19 cases nationally, including a large bump in North Carolina, has us worried on a number of fronts—including its potential impact on the budding economic recovery. The $64,000 question has become, “Will we see a double-dip recession?” After the substantial rebound in consumer spending in May and early June, the most recent data suggests a stall in activity over the last month. Combined with an out-of-control worsening of the pandemic in several states, this trend is worrisome. Yet current conditions do not guarantee another plunge in the economy like the one we experienced in April. In this commentary, we look at the situation from our preferred three angles: health statistics, economic data, and individual behavior and welfare assessment.
The COVID-19 pandemic increased economic inequities in a number of ways, including in access to external capital – and while 2020 marked a break-out year for venture-backed firms, the pandemic hit many main street businesses hard. In this Kenan Insight, we explore the forces driving the haves and have-nots in this new economic climate, as well as actionable policy solutions as government support programs wind down.
Director of the Digital Enterprise & Innovation Laboratory, Kenan Institute of Private Enterprise
Assistant Professor of Strategy and Entrepreneurship, UNC Kenan-Flagler Business School
GlaxoSmithKline Distinguished Professor of Operations, UNC Kenan-Flagler Business School, and 2024 Kenan Institute Distinguished Fellow
As the U.S. continues to face COVID-19 and supply chain disruptions, experts debate just how worked up the economy is in its current state. This week’s Insight serves as the first in a two-part point-counterpoint series, in which Kenan Institute Executive Director Greg Brown and Chief Economist Gerald Cohen hash out the arguments both for and against an overheating economy.
The jumps in the inflation rate over the last few months have been larger and longer-lasting than expected. For much of 2022 economic forecasters, including those at the Federal Reserve, assumed that higher inflation rates would be short-lived—or “transitory” using the preferred jargon of the day. Inflation was expected to start shifting back towards the Fed’s 2% target as supply-chain bottlenecks were resolved and a pandemic-induced shift in demand for consumer goods swung back toward consumer services. Instead, recent inflation prints have set 40-year records and we are seeing more discussion about the possibility of a “wage-price” spiral.
Dudley and Louisa Dillard Professor of Economics, University of Maryland, and 2023 Kenan Institute Distinguished Fellow