Question
Pandemic containment policies have cut global production which has led to rising unemployment in 2020. However, some predict that the coronavirus pandemic might stimulate innovation
Pandemic containment policies have cut global production which has led to rising unemployment in 2020. However, some predict that the coronavirus pandemic might stimulate innovation and help workers become more productive, e.g. see:
How Innovation Is Driving Productivity During And Beyond The COVID-19 Pandemic
Have we just stumbled on the biggest productivity increase of the century?
This article: https://www.forbes.com/sites/danielnewman/2020/05/08/how-innovation-is-driving-productivity-during-and-beyond-the-covid-19-pandemic/?sh=478fc10277b2
In this context, use the WS/PS model to illustrate and explain in some detail what happens to an economy's equilibrium unemployment in a post-COVID-19 world.[10 marks]
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