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Will coronavirus destroy the global economy? Show more Show less
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How will the coronavirus pandemic affect the global economy? The virus is fast spreading across continents, causing major corporations to close their offices and airlines to go bust. Coronavirus has already been blamed for the record-breaking one day fall in the US economy. What's next?

The economic impacts of the coronavirus are short-term Show more Show less

Markets fluctuate. The coronavirus has shaken the global economy, but this will stabilise as governments put in measures that account for the illness.
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The virus 'shocked' markets, but this will stabilise

Historically, unforeseen circumstances have a negative impact on the economy. Yet as recent examples, such as Brexit, have evidenced - these are rarely long-lasting.
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The Argument

The Chinese economy has measures in place to deal with crises like coronavirus. The Chinese central bank has already began to loosen monetary policy to shield the economy.[1] Additionally, there is precedent for China being able to whether a storm like coronavirus. During the SARS crisis in 2003, the Chinese economy took a huge hit. However, the economy stablised during the following quarter and the negative impact was offset by economic growth.[2] Ultimately, concerns about a global economy collapse are an overreaction. The Chinese economy has measures to absorb the economic shock. Coronavirus certainly has the capacity to negatively effect the markets, but any negative impact will be counteracted over time.

Counter arguments

The coronavirus epidemic is already much worse than SARS. Roughly ten times the amount of people have been infected and more than 150 million people are on lockdown.[3] This is no simple shock - it is a serious crisis that will impact the global economy for a long time.

Premises

[P1] Precedent shows that the economy can stabilise after an economic shock. [P2] Coronavirus will not cause a global crisis; it is simply a blip.

Rejecting the premises

[P1] Coronavirus is much more serious than other crises we have seen. [P2] The impacts will be far more long-term and serious.

References

  1. https://www.nytimes.com/2020/02/15/opinion/china-economy-coronavirus.html
  2. https://www.marketwatch.com/story/three-reasons-coronavirus-wont-derail-chinas-economy-2020-01-27
  3. https://thehill.com/opinion/finance/483899-chinas-coronavirus-economic-cardiac-arrest

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This page was last edited on Wednesday, 4 Mar 2020 at 11:30 UTC