Outright state collapse is not an implausible scenario for petro-states from Ecuador to Iran. As large employers (and the states or provinces that depend on their tax revenue) collapse, governments may fall.

While European social policy keeps households afloat far better than AmericaвЂ™s meager welfare, AmericaвЂ™s single market is far more efficient than the eurozone, where leaders wonвЂ™t agree to a sufficiently large mutualized debt scheme. Industries from commercial real estate to aviation will suffer enormous write-downs on office buildings and shopping malls, airlines and airports. Once revolving credit lines are tapped out, numerous large firms will collapse or be consolidated. For governments and corporates, however, spiraling debt is a matter of immense concern. A long-drawn-out W shape is therefore the most likely economic scenario for the years ahead.ДЄt a human level, the current economic nosedive is so steep that GDP figures are the last thing on most peopleвЂ™s minds. Precautionary savings and muted consumption will govern household spending decisions, and business investment will sag. Their demise weakens the world economy as a whole.ДЇurthermore, domestic unemployment is reaching Depression-era levels, and the current relief packages donвЂ™t yet amount to the stimulus that many Western publics may need for years to come. Emerging markets and developing countries are critical both as suppliers and markets. The current American debacle with surgical masks and ventilators is a case in point. Most importantly, supply chains and markets are more integrated than commonly appreciated, and near-shoring is more difficult than the wave of a pen. Numerous factors militate against this sanguine view. We should therefore be cautious about forecasts suggesting we face only a U- or V-shaped recession. Domestically, they face a painful choice between reopening their economies and exposing their populations to further infection. At the moment, all countries are self-isolating, but in this trajectory, some countries would be indefinitely ring-fenced from physical exchange with others. The aggregate death toll crosses from under 100,000 at present to nearly one million or more.

Countries that have accepted the rhythms of shelter-in-place policies and deployed contact-tracing technologies may be able to isolate pockets of exposure through strict quarantines, but poor and densely populated countries will remain especially unprepared and vulnerable. The most obvious tail-risk scenario to consider is that the numerous existing strains of COVID-19 encircling the world continue to ravage societies and the search for a vaccine proves more elusive, extending beyond the currently forecast 12-18 months. Reality will likely turn out differently-and it certainly can. It is easy to predict further doom after a devastating phenomenon such as the coronavirus.

Can we forward-engineer probable scenarios emerging from the consequences of todayвЂ™s pandemic? Given how stretched our institutions are in coping with the current crisis, few tasks could be more urgent in helping us prepare for the future.

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