Emerging Pathways for Post-COVID Reset and Recovery
World Economic Forum report summarizes the emerging contours of the current global economic environment to identify priorities for further action by policy-makers and business leaders
The results of the survey and the deliberations among the Chief Economists Community point to three key emerging challenges faced by governments and business leaders as economies begin to enter the recovery phase.
- Retooling economic policy to reduce inequality and improve social mobility
- Identifying new sources of economic growth
- Aligning on new targets for economic performance
However, in line with current levels of global uncertainty, we found limited consensus on the order of magnitude of reforms needed. Responses to the Chief Economists Survey range from agreement that the necessary economic transformation will require reform and institution building on a post Second World War scale to more cautious perspectives. The question of the scale of these challenges and the responses to them warrants further exploration in subsequent editions of the Outlook.
Respondents were in strong agreement that the inequality dynamics which the crisis has accelerated need to be urgently addressed through an adaptation of tax architectures. They should also be more systematically monitored by governments along with other targets, such as evolutions in natural, social and other types of capital. A slight majority of respondents also felt that some form of unconditional basic benefits should remain part of the social policy toolkit beyond the crisis, however, there was no consensus.
When it comes to identifying new sources of growth, views were sharply divided over the role of governments in the innovation process. There were voices both strongly in favour of governments proactively setting a direction for innovation and strongly against.
For the process of structural change within economies, most respondents felt that government support in this current phase of the crisis should be targeted more towards the growth sectors of the future rather than protecting all jobs.