I used to think like Roko, and that’s still in the realm of possibility, but I’ve been updating from the way others are reacting that this may be more serious. Lots of those SMBs close and never come back. How long does that dislocation last? The economy isn’t very agile anymore.
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Replying to @WilliamAEden @robinhanson and
Do we have any previous data to go on? This seems like a question where historical data would be very applicable. 2008?
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Replying to @RokoMijic @RokoMijicUK and
Recessions have been getting longer since '91, independent of whether they're shallow ('01) or deep ('08)
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Replying to @eigenrobot @RokoMijicUK and
Slopes of lines for 91, 01, 07 look the same. So the recovery rate is the same? But the lowest point of recession was deeper so recovery took longer. Ok let's use this slope to predict how long would a recovery of 30% lost jobs look like.
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Replying to @eigenrobot @RokoMijicUK and
Possibly some complications to that approach though. Last recession was driven by a debt crisis, stylistically those can take a long time to unwind There were also major structural changes going on in the economy at that point; may have been more completed by now
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Replying to @eigenrobot @RokoMijicUK and
It's very possible and I would very much like us to have a nice V-shaped recovery. But I see no guarantee. Remember the entire world is facing this shock more or less at once. That means we're affected not just by the stop in domestic demand but also global.
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Replying to @AlexGodofsky @eigenrobot and
Plus the sheer scale of layoffs and bankruptcies may destroy a lot of organizational capital and reduce our potential output.
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Replying to @AlexGodofsky @eigenrobot and
What are the economists saying about that?
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eigenrobot Retweeted eigenrobot
until a specialist gets a blog post out,https://twitter.com/eigenrobot/status/1244968260333752320?s=19 …
eigenrobot added,
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Replying to @eigenrobot @AlexGodofsky and
What about wars? What we are experiencing now is less disruptive than WWII. But AFAIK economies recovered fairly well after that? What about the 1919 pandemic. Wasn't there strong economic growth after that too?
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Replying to @RokoMijic @RokoMijicUK and
off the top of my head, there was a lot of variation; hard to disentangle from (eg) hyperinflation in Germany driven by reparation payments I think the point is more related to the observation that economies (especially wrt unemployment) seem to be less-elastic in recent decades
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