For those who worry about the world's wealth and wellbeing, the term "economic shock" has a special meaning.
As defined by people like the Bank of Canada's governor Stephen Poloz, while economies are always in a state of flux, occasionally an outside force, usually unforeseeable, or at least unexpected, will sweep in and put everything awry.
It seems increasingly certain that the outbreak of coronavirus spreading from Wuhan, China, is such an unanticipated disturbance to the global, the North American and Canadian economies. And yesterday Canada's finance minister Bill Morneau said Canada would inevitably be affected...
There is so much unknown about the virus and its potential that the numbers can only be educated guesses, but experts interviewed by credible sources such as the Financial Times and the Wall Street Journal offer estimates that China's GDP will fall by two or more percentage points. That would represent a decline of more than one-third.
Many of those calculations are based on extrapolating from the economic impact of SARS, which killed nearly 800 people during its eight-month run 17 years ago. The fact that the new, related virus has killed more people in only three months is only one of the many differences.
For one thing, the Chinese economy is much bigger than it was in 2002 when the SARS outbreak began. The International Monetary Fund estimates that in 2020 that economy represents nearly 17 percent of global activity compared to around four per cent in the era of SARS. Thus the global coronavirus effect will be much larger...
This was excerpted from the 11 February 2020 edition of CBC News.