Benefit of having a big civilization with lots of interactions, lots of people meeting people, doing business, creating. Good morning. Good evening, depending on where you are. Thank you for joining us. Senior fellow and Vice President of the Global Economy and development program, and brookings. The Global Economy is in perfect. The pandemic continues disrupting billions of lives, jeopardizing billions. The World Bank Global economic prospects which relates this conversation, its infraction on global gdp in 2020. This is the global recession since world war ii, since 1870. Its informed by an assessment fundamental drivers of a long time ago, a formation. The location of trade but headline Economic Growth number, having its proportionate effect and lower Income Countries, the large. There dominated the ability to adjust to covered religious measures such as confinement. The population in such the pandemic is likely to leave a legacy of inequalities between and within countries, and the dimension. For covid and inequality. As to whether the work is. Notably, the epicenter of the pandemic appeared to the global south with the ability and response to the economy are elevated in several countries. The lack of sufficient Global Corporation the pandemic means the global system remains full by its weakest link. The Global Economy eradicated in every country. We are seeing a resurgence of new cases notably the u. S. , policymakers who stand back and meanwhile, encouraging progress, the timing for the discovery of a vaccine or treatment remains uncertain so it this raises questions in my mind. The rebound projected for next year, the timing for a reliable vaccine and treatment. What will be the long lasting effect of the pandemic the drivers of Economic Growth for Human Capital investment but also critical sectors that were hit particularly hard. What do we make of the disconnect between industry and wall street . Market industries have largely recovered losses despite highly uncertain economic environment outlook. Finally, other Silver Linings . What we see opportunities in the economy . Policy makers making priority, an opportunity to provide this global activity which has been threatened Major Economies in this Global Crisis . Online, we imagine what a post Global Pandemic can look like. The expert to make sense of this all and i look forward to the conversations which will be moderated by my colleague, a representation by this. Thank you. Thank you for this distinguished panel. I will share my screen really quick. Prospects in this, because of the focus on people, applications of the pandemic, such that a global infection, its affected work, the recession, economies are going to experience, it is this outlook, and the second is the patience of the pandemic. And then, following recession, care going to be lasting. In the context of the pandemic, we are expecting big potential outlook we can imagine. Finally, priorities and agenda and to discuss crisis if the urgent priorities but beyond the crisis, policy makers need to look forward at policy measures for a strong role. Im going to use this, this year end next year. By now, there is a plunge around the world. We are expecting Global Growth to be around minus 5. 2 this year. In the case of this economy, its going to be the largest. With Global Growth for an extended time, being able to expense the first recession they will see by about 2. 5 . If you look around the region, we see differences but a serious bounce is underway. Expecting policy merely because China Economy pushing this growth will. 5 . Other than that, all regions district contraction. It will see a contraction over the past 100 years. Around minus 7. 2 . Central asia, east. Regions and countries with exporters will see significant advance. All will see historical contraction and we will contract by about 2. 2 . Growth will come back but we are expected, this is a global recession. If we go back to 1870, we have reasonably good data, 14 global recessions, each global recession and Global Economy contracting. This will be the fourth global recession. The second world war. Recessions are important here, two of them associated with world wars. Logical future is Global Economy will see and experience a contraction. Slightly more than 90 is huge. This is higher than what we saw than the Great Depression. There are risks in these risks are still there. The single most important risk is a second wave of pandemic coming. If you look at this, as economies exit the united states, we will see infections falling significantly. The beginning of march. On the other hand, economies in the pandemic is in full force. Theoretically, market in south asia, you see a significant increase number of infections. The capacity and limit Testing Capacity so the pandemic in these regions. Beyond the short term, they have implications. There are large losses and these losses were to be recouped, next year it comes back. In fact, if it happened during the 2009 global recession, we are not going to go back to pandemic numbers anytime soon. These types of recessions will have more and the Effect Commission and of course, productivity. In this pandemic, the Global Economy is going to be concentrated by the devastated shock. The pandemic, longterm Global Growth, since the Global Crisis, in 2010, the Global Economy, ten years ahead growing about 2. 3 . Declined in 2014, 2. 4 . The pandemic will have a long over global expectations. Physical and policy committees, and alarming response to the crisis. What goes sooner or later, there will be a deal. Much higher levels and much higher deficit. Its important governments, to basically try to redraw the stimulus and the time comes. To basically reach sustainable levels of debt. Its an important risk need to Pay Attention to. In this crisis, so far, the financials appears as recession but we shouldnt deceive ourselves and offer the Global Financial crisis, especially before the economy. Priorities are. In short term, help economy crisis. This requires systems, and anything corporate in the economy in an intelligent way. Policies globally is also difficult and in this context, we need to provide for those economies, they need this in desperate times they are facing. Its a crisis policymakers need to look forward and have sustainable longterm growth. A number of important pieces, a discussion about what this is, there are policy issues here. The context of the shortterm and there are policy priorities in the pandemic. In institutions, to attract the necessary activity. Policy and global challenges he, the necessary formation in these challenges emerge. Global trade and Financial Systems are experiencing tidbits and agreements to push forward and agreeable and systematic financial growth. I think the crisis could be a slow ability and in this context, its going to be important to address challenges associated with climate change. So like this, they are in a Global Financial crisis. A discussion about the shape, this shape is recovery. I think this is useful, thinking about Global Economy struggles, the nature of this, policy makers need to go out and get comprehensive responses. It is true how they are going to eventually. That is the subject. Thank you. Thank you. Im hoping everyone can see the whole panel at this time. Glad to moderate this panel. Im joined by my colleague between brookings and cornell which is why you have cornell on the background. The chair of Global Research jp morgan, one employer and we met at the beginning of our program, Vice President for Global Economics developments brookings, is going to join us as well given his interest. Youre interested in whether your view of Global Economy matches the one he just laid out and what you see in markets. You talk in your report, a powerful quote the second half of this year. But we know, markets, latin america from africa is different from china. How do you see the world and how do you see it differently and world bank . Thank you so much for those questions and thank you for the Brookings Institution for the invitation and report. Let me start with the first question, why is there a disconnect between main street and wall street . And i will go into the discussion. The first thing, this time around, the Global Financial crisis, weve had an immediate proactive response from all Central Banks, emerging market Central Banks. If you look at the size of the expansion of the Balance Sheet, we estimate its about 20 of gdp. If you compare that to the Global Financial crisis, thats about 6 of gdp. Expanding by more than three times what we call the Global Financial crisis. At the same time, look at how low Interest Rates are right now, we estimate nearly 70 of global Government Debt has a yield of 50 basis points or less. So youve got negative yielding and basically close to zero and 70 of the market and thats the equity market is at the same time, market liquidity is poor here so you have to be careful you will have this. We estimate the liquidity is about 60 weaker than it was in the market and it was before. Thats the first thing to say about the disconnect between main street and wall street, the Balance Sheet is expanded by 3 trillion, they are on a buying spree of Epic Proportions here but let me turn to the Growth Outlook and forecast and we agree and rely on a large supply in the third margin in 120 years. We have the advanced economy contracting by 4 and emerging market if you take out china, we had China Growing one of the few countries growing positively, you have it at 6 or more in the emerging markets. I would say yes, we do see a rebound because the first half of the year, we had about 16 annualized drop in gdp. If you turn everything off, going to get the rebound. But thats not the easy part of the recovery. In respect to the level of gdp, the level of gdp at the end of the year, will be about four Percentage Points where it was prepandemic so youve got these numbers that are going to be printing, 20 of gdp in the second half of the year but look at where we are in respect of gdp, 4 below where we were prepandemic. With income loss, i think its going to be very large longlasting damage but youve got another one or two months for the day that is coming out it is going to look quite good but this is going to be trickier in the Fourth Quarter because many of these supports will rules. We are left with a deficit estimating 13. 8 of gdp, the highest in 80 years. When looking at Public Sector debt from 15 to 20 Percentage Points higher. A third due to potential liability and we are looking at in the emerging markets, three different scenarios for emerging markets. The more countries are feeling better as output cap but if you look at latin america, we looking at 9 contraction for latin america. This is where the pandemic still has not peaked yet. We are seeing some of the biggest losses that will take place. Then you have african countries, some of the highly structured countries, all these official relief measures done by the g20 so its hard to characterize emerging markets as one block but china is very important here. China, we estimate every 1 decline in chinas growth is about. 4 of Global Growth. Thats why we look at the numbers in china with china. The export but we are looking at a decline for trade thats been going down consistently over the last couple of years and it will continue. Let me finish, u. S. China tension as well as the possibility of a second wave, i think what youre seeing now is a wave that there is still a second wave. Sometime before you have a vaccine ready, widespread use but the losses of the corporate level are going to be significant despite the market rebound weve seen in Financial Markets. We estimate it dropped by about 70 in the Second Quarter of the year, we are at 6 rate, the highest in ten years. Weve had 150 billion of debt downgraded from highgrade to highheeled, you still see this tremendous level of support coming from banks more broadly and you see it not just the central bank, 15 emerging markets are being pushed as well so we are in the Global Financial crisis, we exhausted a lot of that and its the last thing parts we need to monitor going forward. You said stock market has been strong despite the scary headlines about the economy in part because there are few alternatives for money and banks have made it attractive but if the market basically assumes there will be a second wave or a decline in global productivity, is the market fully factoring in some of the risks you elaborate . I think the market is going nowhere anytime soon but the Central Banks are in for the long haul. This has been a real paradigm shift. There are things, there will not be a lockdown like we saw in march april. If we have a second wave, we are seeing a second wave but not the wave of fatalities we saw a few months ago. 80 of the s p 500 stock has a higher shareholder yield than u. S. Treasury yield. If you get 70 of the deaths close to zero yield, there has been a search for yield in the market. Record issue of the u. S. Bond market, look at 1. 6 trillion this year because corporate are trying to get ahead of this. Trying to get the Balance Sheet get near zero so they do have a question to enjoy but its not recovery, we are seeing right now is necessary but in this condition recovery, its an incomplete recovery. Want to invite you to react to whatever you want but i have one question. What weve documented is an extraordinary response by policymakers and of course, theres one set of people economists, many of them will say thank god and this is why we are not looking at Great Depression 2. 0 but i hear a lot from people about like is this a perpetual motion machine . Okay long can we go on with trillions of dollars of debt . Line have the bonds the treasury issues, what are the risks to this sort of policy response and that bubble . Certainly listening to the support and listening, it helps. We should be humble enough to recognize the economists are terrible at forecasting recession but its easier to get carried along with economies like that and certainly all the indicators would suggest about worst yet, the Financial Market is simply doing okay. Its not related to fundamentals but a couple of promising things, two months ago, three months ago, the chinese economy would have a recovery and it does seem to be in motion, the Manufacturing Sector is doing well. It seems to be picking up, the economies are picking up again even though theres a lot we are concerned about especially the market economies and even in the u. S. , beginning to see some of the numbers beginning to come back up so perhaps, not our duty at this stage, its a lot harder to tell. It easy to tell because whats going on in the demand and supply components, the initial phase looks like this because of the lockdowns as well. Perhaps once we got past the lockdowns, the supplies would be better taken care of. On the demand side, macroeconomic policies both physical policies can. There have been huge amounts of stimulus that practically every major economy dont at this problem and its at least the worsening about its supported demand enough to provide a robust recovery, far from obvious but the bigger question is whether these policy tools, going about risk are the supply. I have support that i have significant concerns about productivity and coming into this recession, we already had very few productivity coming out of the last recession by the financial crisis of 2009. Private investment was given and in china which has had recent growth, which has come from the Public Sector rather than private investment. The other concern is even though the financial system, this is a very important distinction from previous sections, especially the system coming out of it, that has not quite system this time but especially for the very important growth and productivity growth in the economy and these are the small and Medium Enterprises and especially in economies like china and the Service Sector as well. How long this could be, i think there are significant worries on the