We Need a Name for the Greatest Economic Crisis in a Century

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The IMF calls it theGreat Lockdown. Morgan Stanley says it’s the Great Covid-19 Recession, or GCR for short. Ed Yardeni, who coined the term “bond vigilantes” back in the 1980s, has named this the Great Virus Crisis.

There’s even a suggestion to call it aPandession.

As economists around the world search for the right terminology to describe the biggest economic crisis since the Great Depression, it could take years to settle on a name, if history is any guide.

While many in the U.S. now refer to the 2007-2009 slump as the Great Recession, that term is far from universal. In Anglo financial centers like Sydney and London, the term GFC — short for Global Financial Crisis — is more common. Others call it the North Atlantic Financial Crisis, since that’s where it hit hardest.

25,294 in U.S.Most new cases today

-14% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​073 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-4.​8% Global GDP Tracker (annualized), April

As for the origins of the ‘Great Depression,’ it’s a term that was used by various U.S. presidents and others such as British economist Lionel Robbins, who published abook in 1934 titled “The Great Depression.”

Great Lockdown

The Great Lockdown has the backing of the world’s premier economic body. At its spring meetings in April -- held virtually this year -- the International Monetary Fundused that phrase to summarize how the world economy had been upended.

But there are rivals. Yardeni, president and chief investment strategist of Yardeni Research Inc., floated the Great Virus Crisis in aninterview with Bloomberg News in March, and has been plugging it in his research notes since.

“A well-coined phrase conveys a lot of information once it becomes universally accepted,” Yardeni said in an interview, adding that he still gets calls asking about “bond vigilantes” decades after he first used the term.

“When you go on Wikipedia and look for Great Virus Crisis, if it’s there then I guess it made the hit parade,” he said. “Or else we’ll find something else, Great Lockdown or whatever.”

For Morgan Stanley, its use of Great Covid-19 Recession reflects its expectations for the deepest peacetime contraction in global growth since the Great Depression, according to Chief Economist Chetan Ahya.

“We also note that this recession was not initially triggered by a financial shock, but rather an exogenous shock driven by Covid-19,” he said.

What’s in a Name?

Then there’s Pandession, as suggested by economist David McWilliams, who previously worked for theCentral Bank of Ireland and lenders includingBNP Paribas.

“A Pandession is a new word because it is a new thing,” McWilliams wrote in a blog post. “Language is vitally important when confronted with something novel. If you don’t have the language, you can’t visualize, conceive of or think your way out of it.”

Other names in the mix include Global Coronavirus Recession, or GCR, from Oxford Economics, or the Corona Crisis, as touted by various analysts. Economists with Bloomberg Economics have used phrases such as the Global Hard Stop or the Virus Recession.

There’s also a chance the current downturn could affect how economic historians refer to the 2007-09 crisis. After all, the Great War became known as World War I once the even more destructive World War II came along.

Because history takes time to settle, it may be too early to agree on a descriptive name just yet, said Michael Every, head of Asia financial markets research atRabobank.

“It’s not binary,” Every said. “The Great Lockdown is likely to be the opening salvo of something else.”

— With assistance by Gordana Filipovic, Jasmina Kuzmanovic, and Reade Pickert

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