CONNECTICUT ECONOMY
EXPERT PANEL PREDICTS AT LEAST FIVE YEARS UNTIL CONNECTICUT’S ECONOMY RECOVERS FROM THE CORONAVIRUS PANDEMIC By Hannah Providence
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onnecticut Governor Ned Lamont has recently graced news headlines, optimistic about reopening the economy in May. “We can start thinking about how we’ll get our businesses back to business” he tells Fox News. The media echoes this notion as citizens yearn for assurance of a “return to normal,” But, even if businesses begin to reopen, a state of “normal” proves to be farther in the future. Will the Connecticut economy ever recover from the coronavirus pandemic? If so, how? When? The University of New Haven arranged for five expert economists and business professionals to help answer these looming questions. The panel consisted of two former trading partners at major banks, one professor of economics, one former CEO of a Connecticut-based global manufacturing firm, and the owner of a global consulting firm, also based in Connecticut.
Figure 18: “L-Shaped” Recovery
Four of the five panelists voted the “L-Shaped” recovery as the most probable. The trend of GDP in this case is shown below.
Figure 19: Malaise
One panelist voted the “Malaise” trend as the most probable. In this instance, once GDP declines it remains stagnant at the minimum level.
Conducting a study using the Delphi technique — an iterative research method designed to predict practical solutions with limited data — the experts were able to narrow down the trends in the economy’s output, as measured by GDP, to two possible scenarios. An “L-Shaped” recovery, in which GDP will decline drastically at first, but slowly climb back to the status quo. The majority of panelists determined this is the most probable trend and should occur over five years. The minority vote ranked the “L-Shaped” recovery as only the second most probable trend, saying that Connecticut will not be able to recover so quickly. Instead, in this scenario, GDP will more than likely continue to drift below the pre-COVID level well beyond five years. This GDP trend is titled, “Malaise.”
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CONNECTICUT ECONOMIC ACTIVITY REPORT • SUMMER 2020
The panelists defended their reasoning saying that this five-year maximum recovery could happen because of a few important factors: • Safety precautions. The promise of a vaccine in the next few years will allow citizens to feel protected when leaving their home.
