The year began with lockdowns and varying degrees of restrictions on movements across the world as the Covid-19 pandemic accelerated with new, fast-spreading variants being discovered. Financial markets, however, began with new records.

The pandemic is projected to have caused the global economy to decline by about 5 per cent in 2020. Meanwhile, government deficits are projected to increase above trend, by about the same amount. Despite the combined loss of one-tenth of the global economy,…

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