How this recession will and will not differ from previous ones.

  1. I will be constantly updating this piece with new information, ideas and data.
  2. Nobody really knows what the next five years will look like. This is an unprecedented crisis and there is a staggering level of overconfidence in our (individual and collective) ability to predict the future.

Ways the current recession and recovery will almost certainly be similar to the last four

#1: Deterioration of federal and provincial income statements and increasing deficits. (This should go without saying).

Source
Source
Source

Ways the current recession and recovery will, in my opinion, likely be similar to the last four

I would have put these in the “almost certainly” category, but I won’t since a number of very smart people disagree with them. We should not be overconfident during this crisis, so I will downgrade these to “likely”.

Ways the current recession and recovery will almost certainly be unlike the last four

Pundits and economists (like those I mention in my earlier piece) are not wrong that this recession differs substantially from previous ones. Here are a few key differences.

  • Early 1980s: Federal Reserve’s fight against inflation
  • Early 1990s: Federal Reserve and Bank of Canada’s fight against inflation
  • 2008–09: Financial meltdown in September 2008 following the 2007–08 subprime mortgage crisis
  • 2015: Oil price crash impacting Canada’s terms-of-trade
  • Working from home
  • Online shopping
  • Online banking
  • Working out at home
  • Cycling
  • Downloading video games (rather than buying physical media)
  • Using public transit
  • Eating at restaurants
  • Air travel
  • Attending movies, sporting events and concerts.

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Mike Moffatt

Mike Moffatt

Senior Director, Smart Prosperity. Assistant Prof, Ivey Business School. Exhausted but happy Dad of 2 wonderful kids with autism. I used to do other stuff.