As this pandemic hopefully winds down, its useful to think through the forecasts and analysis that economists got right, and what we got wrong. This is important because the U.S. has not ever been through such a deep, rapid, nor nearly simultaneous economic downturn. Never has our fiscal response been as rapid or comprehensive. Thus, economists have played an important and lingering role in this pandemic. I begin with what we got right.
The pandemic’s effect on the economy was fast and furious. Nearly all the jobs lost during the downturn occurred before any government action to close restaurants and bars, enforce mask standards or limit gatherings. State governments responded with wildly different limitations, making it relatively easy to isolate the effect of disease and government action on the economy. Over the past several months a number of high-quality studies have made clear that it was disease, not government, that delivered and sustained this recession.