Global macroeconomic scenarios of the COVID-19 pandemic

The COVID-19 global pandemic has caused significant global economic and social
disruption. In McKibbin and Fernando (2020), we used data from historical pandemics to
explore seven plausible scenarios of the economic consequences if COVID-19 were to
become a global pandemic. In this paper, we use currently observed epidemiological
outcomes across countries and recent data on sectoral shutdowns and economic shocks
to estimate the likely impact of COVID-19 pandemic on the global economy in coming
years under six new scenarios. The first scenario explores the outcomes if the current
course of COVID-19 is successfully controlled, and there is only a mild recurrence in 2021.
We then explore scenarios where the opening of economies results in recurrent outbreaks
of various magnitudes and countries respond with and without economic shutdowns. We
also explore the impact if no vaccine becomes available and the world must adapt to living
with COVID-19 in coming decades. The final scenario is the case where a given country
is in the most optimistic scenario (scenario 1), but the rest of the world is in the most
pessimistic scenario.
The scenarios in this paper demonstrate that even a contained outbreak (which is
optimistic), will significantly impact the global economy in the coming years. The economic
consequences of the COVID-19 pandemic under plausible scenarios are substantial and
the ongoing economic adjustment is far from over.