Understanding Economic Equilibrium

CHAPTER 20

COVID-19: How the Pandemic Changed Business

This time it was different.

Typically recessions happen when consumption slows due to a perceived imbalance or problematic issue in the economy. People fear a decline in their income long term and stop buying things they deem unnecessary, which slows the economy, which leads to layoffs, which takes the nation into a recession. But that wasn’t the case in 2020. The economy looked strong and sustainable. We were near full employment; many companies and industries were having trouble getting appropriately skilled workers. Then came COVID-19. In the middle of March the U.S. economy essentially shut down. More than 20 million people lost their jobs in the month of April (compared to 800,000 during ...