How might the world be different after the pandemic?
The most important answer is, we really don't know.
This is a completely novel experience.
In terms of what's causing this economic and social crisis,
a pandemic, and the nature of the response
by governments, to close down economies,
the combination is unprecedented.
We've had crises that start with a real economy,
like oil shocks.
We've had financial crises.
But these things happening altogether
and driven by disease is new.
And because of that we don't know
what's going to happen in the next two years or so.
And that will shake the world after the pandemic.
The thing we most definitely know
is that we will emerge from this crisis with much more debt
in the public sector, very large fiscal deficits,
a lot more debt in the private sector as well,
and almost certainly we will already
have experienced a great many defaults, particularly
in the private sector, and particularly
in emerging economies.
These are sources of real fragility.
But if we concentrate just on the debts
that the public sectors will have,
I think it will be manageable.
Real interest rates are likely to remain very low.
We won't see an immediate explosion, or possibly
any explosion of inflation.
Well, a consequence seems to be quite clear.
Taxes will rise.
Taxes on the relatively well-off will rise,
I think almost inevitably.
We are not going to be able to repeat in the western world,
at least not in Europe, and I think not in America either,
the sort of austerity policies that followed the last crisis.
This will then be a new social contract, if you like.
It might be as profound as what happened after the second world
war, which was a period of relatively high equality.
Now think about the things that are possible, but not certain.
The most likely change in the world
is in the international context.
The virus and the response to it is dividing the world,
even though it's a common experience.
Relations within the European Union
and still more between the US and China
are terrible, and getting worse.
There's serious discussion of ending the World Trade
Organisation, or ending trade globalisation, more broadly.
There's strong resurgence of nationalism and protectionism
across the world in many different ways.
You can see it very, very clearly.
It's a pretty good guess, not absolutely certain,
so this comes into the likely category,
that the globalisation story, which was already not really
working after the financial crisis, trade growth and stock,
will now go into reverse.
I think it will be very bad for the world economy,
but it will impose massive shifts
in the nature of business and the way business works.
A third factor here is technology.
And here I think the story is more complex,
but it seems almost certain that the pattern of work
we've now experienced, this transformation into distance
working, the move away from the office, the use
of modern technology for running businesses,
most people didn't know they could do this, is permanent.
It's a permanent shift.
It's quite likely that commuting patterns will also
change as a result. The real estate business
will be transformed.
Commuting and the structure of cities will be changed.
This is an accelerated technological change
that was already under way for the benefit of some very
important businesses, particularly the technology
business, and to the huge disadvantage
of other businesses.
Wars and pandemics change the world.
And I think it will change the world technologically as
well as in terms of global integration
and future fiscal policy.
So while we're not sure about all of this, some of it
is much more likely than others.
I think it's reasonable to suppose the world we'll
emerge in - two, three years from now, who knows -
will be really quite different from the world we were
in before the pandemic hit us.