Romer: What will economic recovery look like?
The path toward reopening the coronavirus-battered economy will not be a straight one. Expect sharp curves and occasional detours — a terrain that demands we proceed cautiously, with a roadmap designed to protect public health while maximizing economic activity.
Eagle County’s Transition Trail Map (green circle, blue square, black diamond) serves as a framework for long-term phased reopening. The green phase is a careful first step; looking ahead to blue and black phases, the county is going to provide the public health parameters, but it will be up to the businesses to figure out whether or not to open, and if so, how to operate within the public health guidelines.
Despite all the dour data, the economy should bounce back once the lockdowns are eased. According to Curtis Dubay, senior economist at the U.S. Chamber of Commerce, the question will then become, what shape will the recovery take? Many analysts talk about how it will look like a letter. For instance, will it look like a “V,” a “U,” a “W,” an “L,” or a “reverse-J?”
What each of those shapes tries to convey is how fast the economy gets back to where it was before the shock of COVID-19 hit and the subsequent enormous contraction in economic growth. A short description of each is below:
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- V: A sharp and deep contraction followed immediately by an equally sharp recovery. This is the shortest duration event and the one that gets us back to where we were fastest.
- U: A deep contraction followed by a longer period of depressed economic growth, followed by a rapid return to pre-crisis growth.
- W: A steep drop-off, a short-term recovery, another steep drop, followed by a sharper recovery. The secondary drop is either caused by a re-emergence of the virus or something occurring inside the economy.
- L: A steep decline in growth followed by a period of low growth from which we really don’t recover for the foreseeable future.
- Reverse-J: This is a sharp drop followed by a prolonged, slow recovery that could take a few years.
Of course, the recovery could take another shape too. There is no consensus about the course the economy will take. How we work together — at a local, state, and federal level — will impact this recovery.
Eagle County has done an excellent job, and our businesses will have to help lead the way to keep our community moving forward. Vail Valley Partnership will continue to provide the resources for our business community, and together with partners like the Vail Valley Foundation we have initiated task forces to help provide a tool kit for businesses to have their voices heard, have questions answered, and move in unison so we have clear messaging to our visitors and guests throughout the process of re-opening the economy.
We encourage all businesses to connect with others in your industry sector and help find unified solutions to your industry’s short and long-term challenges associated with COVID-19. Fill out this form to participate. Unprecedented coordination and collaboration between business and government is needed to map how we can begin a gradual reopening of our businesses.
It is critical that states, local governments, and business sectors learn from one another on the best ways to prudently reopen the economy — and these industry task forces are key to achieving that goal.
Thank you for your support and courage as we continue to navigate through this pandemic together. When your business is facing its greatest challenges, we are the partner you can trust to be by your side, working for a better tomorrow.
Chris Romer is president and CEO of the Vail Valley Partnership, the regional chamber of commerce. Learn more at www.vailvalleypartnership.com.
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