{"id":28361,"title":"The state of the world economy \u2013The K-shaped Recovery Continues","link":"https:\/\/bst-europe.eu\/de\/globalization\/the-state-of-the-world-economy-the-k-shaped-recovery-continues\/","date":"27. August 2021","date_unix":1630069898,"date_modified_unix":1630071720,"date_iso":"2021-08-27T13:11:38+00:00","content":"

K-shaped recovery<\/strong>: As the number of coronavirus vaccinations given increases worldwide, the global economy<\/strong><\/a> is starting to recover. However, the economic recovery is not following the usual trajectories we have seen in previous crises. <\/em><\/p>\n

The covid-19 pandemic has produced a new economic pattern – a K-shaped recovery<\/a>.<\/em><\/p>\n

The previous cyclical alphabet<\/strong><\/h2>\n

Following past economic slumps, four main types of economic recoveries<\/a> emerged.<\/p>\n

\"k<\/p>\n

These letters indicate the performance of an economy<\/strong> – measured by the value of all goods and services, i.e., by real gross domestic product (GDP) – over time.<\/p>\n

The implicit assumption is that all sectors of an economy recover at more or less the same pace. However, the current covid-19 pandemic has led to a new kind<\/strong> of recovery \u2013 with different sectors recovering at different rates.<\/p>\n

Covid-19 pandemic – economic recovery at different speeds<\/strong><\/h2>\n

For the first time in history, this economic crisis<\/strong> was caused by a pandemic that restricted or even banned social contacts between people for long periods of time. This impacted all sectors of the economy to different degrees \u2013 and resulted in different consequences.<\/p>\n

In the 21st<\/sup> century, companies that manufacture physical<\/strong> products – televisions, shoes, computers, etc. – can sell their products even when brick and mortar retail stores are closed. Manufacturers can switch to online commerce.<\/p>\n

Some companies were even able to dramatically increase their sales<\/strong> and profits during the Corona pandemic. A prominent example is Amazon – global quarterly profits have reached record levels since the outbreak of the pandemic.<\/p>\n

\"k<\/p>\n

On the other hand, there are numerous service sectors in which services can only be consumed if there is physical contact<\/strong> between the provider and its customers. Examples include an overnight stay at a hotel, a haircut, or a flight – online offers are of no help there. The affected branches are suffering to a considerable extent from the Corona pandemic.<\/p>\n

To make matters worse, the opportunities to make up corona-related sales shortfalls are different<\/strong>. The purchase of a car or computer that did not take place in the spring of 2020 due to corona can be made up in the fall of 2020. However, the Easter vacation that was canceled in 2020 cannot.<\/p>\n

What is a K-shaped economic recovery?<\/strong><\/h2>\n

If the sectors of an economy recover from the Corona shock<\/strong> at different rates, it is no longer sufficient to look at the development of a country’s GDP. Instead, it is necessary to observe how the sectors‘ output develops over time.<\/p>\n

If the output of the sectors measured in monetary units is used, the following stylized picture<\/strong> emerges:<\/p>\n