Covid-19: The Beginning of the Domino Effect Oscar Ugarteche and Alfredo Ocampo

The effects of COVID-19 on the real economy are beginning to materialize around the world. Starting in the second half of March, the first signs of the deterioration of confidence and uncertainty occurred with the world’s major stock market indices falling to multi-year lows; for example, the Dow Jones dropped to the 2016 level, the Frankfurt DAX to 2012, and so on. This note presents labour, industry, and services sector indicators for the G7 and BRICS economies. The same situation is reflected in the rest of the world, with a drop in output and international trade and massive unemployment despite the efforts of economic authorities to inject liquidity. The massive injections of cash by the central banks of the US, UK, European Union, and Japan are helping banks to invest that money in the stock markets and thus try to stabilise them. Meanwhile, the Chinese stock market remains stable.

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(Oscar Ugarteche is a Senior Researcher “C”, IIEc-UNAM, SNI III Conacyt, Coordinator of obela.org and Alfredo Ocampo is a Faculty of Economics, UNAM, Member of obela.org)