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1 1 (March 11, 2020)

handle is hein.crs/govcapt0001 and id is 1 raw text is: Researh Sevice COVID-19: Potential Economic Effects March 11, 2020 This Insight discusses the potential economic effects of the coronavirus (COVID-19) on the U.S. economy. For background on the coronavirus, see CRS In Focus IF 11421, CO VID-19: Global Implications and Responses, by Sara M. Tharakan et al. Channels Through Which the Virus Could Affect the Economy Although the COVID-1 9 outbreak presently is most widespread abroad, it will directly affect foreign demand for U.S. exports of goods and services. As discussed in this CRS In Focus, the coronavirus could also disrupt U.S. companies' international supply chains. If COVID-19 becomes widespread in the United States, it could directly reduce domestic economic activity by reducing both supply and demand. On the supply side, hours worked would be reduced by illnesses and fatalities and any work stoppages to prevent the virus from spreading. On the demand side, spending could be reduced by quarantines and other attempts to avoid crowds, such as public event cancellations. In addition, fear and uncertainty could reduce business and consumer confidence, leading to a reduction in spending. A reduction in investor confidence could also tighten financial conditions. For example, the sharp decline in the stock market since late February 2020 was widely perceived to be in response to worsening news about the virus. In general, these macroeconomic effects would be expected to eventually reverse once conditions return to normal, except to the extent COVID-19 causes worker fatalities. Unknowns in Evaluating the Economic Impact How large could the economic effects of the coronavirus ultimately be? At this stage, uncertainty is so great that a very wide range of economic outcomes-from little effect on the U.S. economy to a severe downturn-is plausible. The unknowns include the following questions: * How many people will become infected over the course of the outbreak in the United States and abroad? * How long will the outbreak last? Congressional Research Service https://crsreports.congress.gov IN11235 CFS NStGHT Prepai-ed for Mernbei-s and Co-mmittees of Co-- gress