What is K-Shaped Recovery?

• To fight the health (COVID-19) driven economic crisis, a record fiscal deficit, and record public debt has invited the twin-balance sheet crisis (crisis in the balance sheet of companies and banks) and created monetary challenges.
• So, it is almost sure that a pandemic would create a recession and economists have debated on the shape of it. There is an unanswered question that would recovery be a ‘V’ shape, a ‘U’ shape, or something new. 
• A ‘V’ shaped recovery is the most optimistic type of recovery as it suggests economic spending and employment will rapidly decline, but after some time, quickly pick back up like a ‘V’.
• A ‘U’ shaped is similar but suggests a longer period of unemployment and low spending than a ‘V’ shaped recovery.
• ‘L’ and ‘I’ shaped recovery is another type of recovery and it is considered much direr. It suggests high unemployment and low spending will have other ramifications like debt defaults and an overwhelming economic system.
• ‘K’ shaped recovery is newly (not entirely a new) identified type of recovery. It is somewhere between a ‘V’ and ‘L’ depending on who you are.  Industries like technology, retail, and software services have recovered and begun re-hiring. On the other side, travel, entertainment, hospitality, and food services industries have continued to decline.  
• K-Shaped recovery also shows the growing inequality resulting from the erratic effect of the pandemic in the indifferent sectors. Just like the letter K, some sector/people have again gained the momentum and begun re-hiring like technology, medical, software, online and internet-based services and whereas, some other sectors have been facing the continued downturn like travel and tours, entertainment and recreation, hospitality and food services, etc.  
• The growing gap between winners and losers among countries, economic sectors, companies, peoples will create more economic inequality.
• Small countries who had already the problem of shortage of capital and financing their spending with external debt will become more vulnerable and the K-shaped economic recession may push them into a debt trap or debt-servicing difficulties.
• Withing the economy or within the sector, the big companies eat the small due to the economies of scale. Small size and infant companies are more vulnerable and they are in the compulsion of collusion with big and larger companies.