Thinking Through the Wide Range of Possible Economic Outcomes

Bridgewater

Greg Jensen, Jason Rotenberg

Article

1 Pages

Bridgewater Associates examines how the pandemic shock could ripple through economies well beyond the initial shutdowns, with global GDP already down over 20%. Even relatively optimistic outcomes imply lingering weakness, while differences in containment and policy capacity could create dramatically different recovery paths across countries.

Key Takeaways

Recovery Could Take Years: Developed economies have historically taken more than 3 years to recover from downturns comparable in magnitude, based on recessions since 1990.
US Outcomes Vary Widely: Bridgewater estimates US output by mid 2021 could range from 9.3% below 2019 levels to 1.6% above them.
Policy Capacity Matters: Brazil’s mid 2021 outcomes range from 21.7% below 2019 output to 3.2% below, illustrating greater downside where policy flexibility is more limited.
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