Cookies on this website
We use cookies to ensure that we give you the best experience on our website. If you click 'Continue' we'll assume that you are happy to receive all cookies and you won't see this message again. Click 'Find out more' for information on how to change your cookie settings.

Market hysteria over coronavirus may have seen hundreds of points wiped off indexes around the world this week, but in this Oxford Science Blog, Oxford University experts maintain the COVID-19 crisis should not necessarily foreshadow an economic downturn.

Professor Simon Wren-Lewis, economist and expert in the impact of pandemics at the University of Oxford, maintains that modelling he undertook after the 2008 global financial crisis, shows the coronavirus crisis should have a short-term impact and need not have a long-lasting effect on the UK economy. This view was echoed by Rishi Sunak, the new Chancellor of the Exchequer,  during this week’s Budget speech [11 March], when he said the impact of the coronavirus will be ‘temporary’.

Professor Wren-Lewis says: ‘Ever since the global financial crisis (and perhaps before) we have become obsessed with markets and, in particular, their imagined predictive power.’

He added: ‘Looking at the markets, it appears the economic impact of coronavirus will be huge and permanent. In contrast my own study, and others we refer to, suggest something very different: that coronavirus will lead to a large negative shock that will be short term, and certainly will not be permanent. So who is right?’

Based on a three-month virus crisis, Professor Wren-Lewis said his modelling study showed, there is a danger of firms going bust, as we have already seen in the airline sector. But, this week, the banks have said they will support hard-hit businesses and the 2009 study showed that, once the virus is over, firms will become viable again.

Read the full blog on the University of Oxford website

Similar stories

Peter Horby receives prestigious award for outstanding service to public health

The Faculty of Public Health (FPH) has awarded its prestigious Alwyn Smith Prize to Professor Sir Peter Horby (Nuffield Department of Medicine) for 2020/2021 in recognition of his outstanding service to public health as a global leader in epidemic science.

Researchers set out steps to address mental health effects of the pandemic on young people

Researchers have outlined 14 steps that schools, mental health services and policymakers can take to help children and young people whose mental health has been affected by the COVID-19 pandemic.

No benefit of convalescent plasma for critically ill COVID-19 patients

A large study of over 2000 COVID-19 patients has found that giving critically ill patients blood plasma from recovered COVID-19 patients did not significantly reduce deaths, or the need for intensive care support such as being put on a ventilator machine.

Increased infectiousness of coronavirus variants explained

Researchers from the Universities of Oxford and Dundee have made a discovery that helps explain why variations in the virus causes COVID-19 to spread so rapidly.

RECOVERY Trial paper wins BMJ’s 2021 UK Research Paper of the Year Award

For the second year in a row, The British Medical Journal have selected a publication co-authored by Oxford University researchers for their prestigious UK Research Paper of the Year Award. This award recognises original UK research that has the potential to contribute significantly to improving health and healthcare.

Over a third of COVID-19 patients diagnosed with at least one long-COVID symptom

37% of people had at least one long-COVID symptom diagnosed in the 3-6 month period after COVID-19 infection. The most common symptoms were breathing problems, abdominal symptoms, fatigue, pain and anxiety/depression.