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After the relaxation in summer, the corona pandemic picked up speed again in autumn and has us firmly under control again.

It takes revenge that we used the summer to relax instead of preparing for the cold season.

The virus was harder working: it has prepared itself even better for winter with a more easily transmitted variant.

New social distancing measures aim to lower the infections and protect the elderly until they are vaccinated.

But neither one nor the other seems to work.

The 7-day incidence has persisted since the end of October at well over 100 new infections per 100,000 people;

For the first time it fell to 98 on Thursday. The incidence of infections for people aged 90 and over has even been over 600 for five weeks. And there are problems with the vaccinations.

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In contrast, the economic costs of the renewed “lockdown” are becoming increasingly evident.

It is now expected that economic activity in the western industrialized countries will collapse again this winter.

The economy could consequently go through a “double dip” recession.

Expectations were too optimistic

My colleague Pablo Duarte evaluated the internet data on mobility, electricity consumption and search queries for hotels and restaurants for the first nine months of 2020.

The analysis indicates that the pattern of the real gross domestic product (GDP) for the period from the first to the third quarter of 2020 could repeat itself in a weakened form in the period from the fourth quarter of 2020 to the second quarter of 2021.

If you take the internet data as a guide, the decline in economic activity in winter 20/21 and the subsequent recovery in spring 2021 in the euro zone could account for around 50 percent of the economic fluctuations in the course of 2020, in Germany even 65 percent, in the US around 40 percent.

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Even if the economy grows robustly again in the second half of 2021, real GDP will stagnate for the entire year 2021 in the euro zone and the USA (and even a further decline in Germany).

The estimates should be treated with great caution, but we should expect a major setback compared to the expectations that were still quite optimistic in autumn.

More and more money and hardly any consumption

The equity markets have of course not escaped the increasing likelihood of a “double-dip” recession.

Yet they remain surprisingly calm.

There are three main reasons for this.

First, due to the increasing number of vaccinations, the end of the pandemic is in sight.

Second, when interest rates are very low in financial accounting, the difference between the present and the future becomes blurred.

Profits expected in the more distant future can almost one-to-one compensate for losses incurred in the near future.

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"Everything on shares" is the daily stock market shot from the WELT business editorial team.

Every morning from 7 a.m. with the financial journalists Moritz Seyffarth and Holger Zschäpitz.

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And thirdly, it is assumed that the states will simply use their central banks to pump more money into the economies if the economic recovery is a long time coming.

Since the large amount of money is looking for uses, the opportunities for consumption and the desire to consume will remain dampened by the pandemic, at least for the next few months, and bonds and fixed-term deposits are no longer generating any income, it is pushing into the markets for stocks and other assets.

The renaissance of Bitcoin and other crypto currencies is also likely to be due to the unbridled increase in public money.

Thomas Mayer is founding director of the Flossbach von Storch Research Institute and professor at the University of Witten / Herdecke

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