What harm does it do to overemphasize GDP?

Corona consequences: The irritating optimism of the economy

"No battle plan survives the first contact with the enemy," the Prussian general Carl von Clausewitz is said to have once said. This is still true today, as the global fight against the Covid 19 pandemic shows. What consequences the spread of the virus and the measures to contain it will have on the global economy has so far been just as difficult to assess as the question of when the rate of new infections around the globe will finally decrease significantly.

But economic advice is urgently needed right now. Politicians have to decide again and again whether and to what extent they want to maintain, expand or weaken the measures they have taken so far.

As the most important economic body in Germany, the Advisory Council for the Assessment of Macroeconomic Development is predestined for this task. And in fact, the currently three economic modes - the two missing new members have not yet been officially appointed - have drawn up a special report at short notice, which is intended to facilitate precisely this weighing.

But even the professionals find it difficult to make concrete forecasts in this uncertain situation. Instead, the Council has developed three scenarios that are intended to predict different economic developments over the next two years.

What all three scenarios have in common is that Germany is facing the worst slump in economic growth since the financial crisis in 2008/2009. At that time, the gross domestic product (GDP) fell by 5.7 percent. However, in none of the three scenarios, not even in the darkest, do the wise men expect such a sharp fall as in 2009.