Coronavirus Questions Answered: Economic Impact
What are your questions about the coronavirus?
We're answering as many questions as possible, from local experts in a range of fields. Ask us online or call 216-916-6476. Answers will be published online at ideastream.org/coronavirus and on 90.3 WCPN ideastream.
Thomas asked on Facebook: The coronavirus may drive a negative impact on the economy. Would a recession amplify conditions on a day-to-day life that would help a virus like this spread, like fewer people choosing to spend money on hygiene? Or would it lessen the impact of social spreading if people were unable to travel or participate in events because of lack of funds?
If people are unable to travel, it could potentially limit the spread of the virus, said Terry O’Sullivan, Associate Director of the University of Akron’s Center for Emergency Management and Homeland Security.
“China and other places saw a significant drop in interactions and people going to small businesses,” O’Sullivan said. “And that actually is indeed going to reduce the amount of exposure.”
In answer to the other part of Thomas’ question, in the short term, we haven’t seen people cut back on hygiene products. O’Sullivan said we’ve actually seen the opposite.
Stores across Northeast Ohio are limiting consumers who attempt to stockpile hand sanitizers and disinfectant wipes. Still, some aisles were empty of products like Lysol disinfectant spray and hand sanitizer, including locally-produced Purell.
[Margaret Cavalier / ideastream]
Mike from Lakewood asked: “ What’s going on at GOJO in Akron with respect to Purell? Imagine they’re running their machines 24/7 to keep up.”
Akron-based GOJO Industries, which makes Purell hand sanitizer, announced it will ramp up production in an effort to meet demand. This sounds like it would be good for business, but Cleveland State University Economics Professor Bill Kosteas said it might be a temporary spike.
"You're looking at an item that has a decent shelf life," Kosteas said. "The possibility is that people who would buy Purell anyway just end up buying more now. So if you end up with a bunch of bottles of Purell, then you just won't buy them over the next one to two years.”
Mike also asked: “The stock market is really bouncing around because of fears over coronavirus and the effects it’s already having on supply chains. Should I be calling my financial advisor?”
Kosteas says if he’s calling to sell his stocks, then Mike might be too late. Kosteas said the stock market will recover, so at this point it’s best to ride it out.
But there are other reasons Mike might want to call his financial advisor. Kosteas said it might be a good time to buy stocks. Mike also might want to refinance his mortgage or buy a house, in which case Kosteas said now might be a good time.
"If you've been on the fence, I don't think you're going to find a better time in terms of interest rates,” he said.