WASHINGTON — Nationally-renowned economists Dr. Arthur B. Laffer and Stephen Moore, both members of President Donald J. Trump’s Economic Recovery Task Force, today released a study predicting a swift economic recovery if states reopen quickly.
“We are advising the White House and many governors across the country, there is a big difference in the swiftness and size of the recovery based on the speed at which states reopen,’ says Stephen Moore. “Connecticut, Michigan, New Jersey and New York would be wise to follow the leads of the states in the south and mountain states, or they could see a deep recession through the end of 2020.”
Countering many predictions of economic doom, Moore and Laffer find that “with the right national policy prescriptions and most states reopening their economies next week, we will see a very sharp contraction this summer with high unemployment followed by a strong recovery will arrive within three to six months.”
The authors compared the sharp economic contraction from the coronavirus with other sharp economic collapses, including the Great Depression, and found that the key market indicators, such as the stock market and the gold price, point to a fast pick-up in growth when the economy gets back on its feet.
“There is just no indication of anything like a Great Depression, says Dr. Laffer, who has advised several presidents and recently was awarded the Presidential Medal of Freedom from President Trump.
The study also predicts a “very uneven” recovery “with some states and regions of the country advancing at a much faster pace than others.” Because states are taking the lead in opening up the economy, some regions of the country will do much better than others. States such as New York, Connecticut, and Illinois in the northeast and Midwest are expected to lag because the governors in those states aren’t opening right away. “The recovery will be led by states in the south like Florida, Georgia and South Carolina and western states like Arizona and Colorado – all of which are starting to open immediately.”
Source: Laffer Associates