'In an era where globalization gets reversed, so does immigration': Rosenberg
The world is facing another depression as the COVID-19 pandemic is set to weigh heavily on global economic activity, according to economist David Rosenberg.
"I think it is a global depression," Rosenberg told BNN Bloomberg in an interview on Monday.
"It depends on what you want to define as a recession or depression. A recession is a haircut to GDP and within a year, who's going to be talking about a recession anymore? Nobody. But with a depression, you're still going to be talking about it for the next five, 10 years."
Earlier this month, the International Monetary Fund said that the COVID-19 pandemic is pushing the world's economies into a recession, but the real economic impact is unlikely to be fully known for years. Central banks and governments around the world have rushed to ease the economic impact caused by the novel coronavirus, including massive unemployment, sharp slowdowns in manufacturing output, and significant disruption to all supply chains.
"If we call '08 and '09, the 'Great Recession', this is 10 times worse at any level. How is this just a plain little recession?" Rosenberg said.
"Depression is something that happens every century but the definition is that this will cause a secular shift in attitudes in terms of how we live, how we work and how we travel, and the approach toward debt and spending. This is going to be a long-lasting impact here."
Rosenberg's comments run counter to what outgoing Bank of Canada Governor Stephen Poloz told CTV National News Chief News Anchor Lisa LaFlamme in an interview earlier this month, when he said it would be "quite inappropriate" to describe the current economic situation as a depression. He noted there was no formal Bank of Canada when the Great Depression occurred nearly a century ago, and policymakers at that time did very little to rescue the economy.
"What we have today is all the tools, both with fiscal policy and monetary policy, fully engaged, precisely because we do read the history books," Poloz told LaFlamme.