If you want to understand potential widespread economic effects of the COVID-19 crisis, read on. I spent several hours gathering academic research to share here. MLA style citations have been provide along with links to resources at the end of this post. 

  • We are facing an unprecedented worldwide economic crisis. Never in human history have we seen this type of economic disturbance. (Fernandes 3-10) 
  • Economic Impact of the COVID crisis is being felt across sectors and around the world (Fernandes 6-7)
  • Second quarter losses will be grater than those seen in the Q1. (Fernandes 10)
  • The economic crisis will affect all sectors, but some sectors, particularly hospitality, will be hit harder. Service-oriented sectors will also be hit hard. (Fernandes 11)
  • Due to disruptions in the supply chain, global trade will fall in every region of the world and will affect every sector of the economy. The World Trade Organization expects global trade to fall up to 32% this year due to the pandemic. (Fernandes 12)
  • In past crises, banks had tools to respond and prevent further damages, but interest rates in this case were already very low which raises concerns that there isn’t much room for an effective policy response. (Fernandes 18)
  • Due to the uncertain environment, it is challenging to predict the economic effects of COVID-19. Nonetheless, given the available data, airlines, retail, hospitality and entertainment sectors will suffer significantly. (Fernandes 19) Data from ADP indicates that the following industries took the largest hits: leisure and hospitality, trade, transportation and utilities. (Cajner et al. 9-10)
  • Countries (and states) that have a larger tourism sector will suffer more than those that are more focused on industry. Countries more reliant on exports will suffer more. (Fernandes 19)
  • A 20.3% decline in U.S. GDP is predicted ($4.3 Trillion in losses) for a three month closure and a six month closure would slightly more than double this figure. (Walmsley et al. 1) On average, each additional month of the crisis will cost 2.5-3% of global GDP. (Fernandes 22-25) 
  • Losses are expected to be greatest to the U.S. economy, as it exports a higher percentage of non-essential goods and services compared with the rest of the world. (Walmsley et al. 2) 
  • The employment declines of 22.4% during the first three months of closures correlate to 35.2 million workers. Employment impacts are greater in the United States, as we employ a greater percentage of our population in the service sector as compared with the rest of the world (Walmsley et al. 2) 
  • Economic welfare as measured by personal consumption is projected to decline by 22.4% in the coming year. (Walmsley et al. 3) 

Works Cited:

Fernandes, Nuno. “Economic effects of coronavirus outbreak COVID-19 on the world economy”. Full Professor of Finance. IESE Business School Spain. 13 Apr. 2020.


Accessed: 13 May 2020

Wamsley, T., Rose, A., & Wei, D. “Impacts on the U.S. Macroeconomy of Mandatory Business Closures in Response to the COVID-19 Pandemic”. Center for Risk and Economic Analysis of Terrorism Events (CREATE) and Sol Price School of Public Policy University of Southern California (USC). 9 May 2020. 


Accessed: 13 May 2020

Cajner, Tomaz, Leland D. Crane, Ryan A. Decker, Adrian Hamins-Puertolas, and Christopher Kurz (2020). “Tracking Labor Market Developments during the COVID-19 Pandemic: A Preliminary Assessment,” Finance and Economics Discussion Series 2020-030. Washington: Board of Governors of the Federal Reserve System.


Accessed: 13 May 2020