Whereas China’s other exports had kept the global economy running for two decades, the virus it exported last December has stopped it dead in its tracks. Such a “sudden stop” has never happened before on such a scale, if ever.
Usually, it is either aggregate demand or aggregate supply that fall off the cliff. This time, thanks to China, both have.
Of the many views that have emerged about the post-China-virus global economy, two deserve attention. This is because they have a special bearing on the way economic theory has evolved over the last 200 years.