New Normal (business)

New Normal is a term used to reflect a change in society, particularly in relation to business and economics, that refers to significant change in financial and business conditions. It has been used following the financial crisis of 2007-2008, the aftermath of the 2008–2012 global recession, and the COVID-19 pandemic. The term has since been used in a variety of other contexts to imply that something which was previously abnormal has become commonplace.

The term arose from the context of cautioning the belief of economists and policy makers that industrial economies would revert to their most recent means post the 2007-2008 financial crisis.[1]

The January 29, 2009, Philadelphia City Paper quoted Paul Glover (activist) referring to the need for "new normals" in community development, when introducing his cover story "Prepare for the Best." External link below: "Gotta Find a Better Way" paragraph 3

The 2010 Per Jacobsson lecture delivered by the head of PIMCO, Mohamed A. El-Erian, was titled "Navigating the New Normal in Industrial Countries". In the lecture El-Erian stated that "Our use of the term was an attempt to move the discussion beyond the notion that the crisis was a mere flesh wound...instead the crisis cut to the bone. It was the inevitable result of an extraordinary, multiyear period which was anything but normal".[1]

El-Erian's lecture cites a May 18, 2008 Bloomberg News article written by journalists Rich Miller and Matthew Benjamin for first using the term: "Post-Subprime Economy Means Subpar Growth as New Normal in U.S."

The term has subsequently been used by ABC News,[2] BBC News,[3] the New York Times, and formed part of a question by Candy Crowley, the moderator of the Second U.S. presidential debate of 2012.[4]

China

Since 2012, China's economy has shown a marked slowdown, with growth rates declining from double digit levels (before the 2007-2009 financial crisis) to around 7% in 2014. In 2014, a statement by Xi Jinping, General Secretary of the Communist Party of China, indicated that China was entering a 'new normal' (Chinese: 新常态).[5] This term was subsequently popularised by the press and came to refer to expectations of 7% growth rates in China for the foreseeable future. It was indicative of the Chinese government's anticipation of moderate but perhaps more stable economic growth in the medium-to-long term.

As of COVID-19 pandemic, the phrase new normal refers to human behavior's changes after this pandemic, doctors at the University of Kansas Health System anticipate that the coronavirus pandemic will change daily life for most people. This includes limiting person-to-person contact, like handshakes and hugs. Additionally, maintaining distance from others, in general, will likely stick around.[6]

References
  1. Navigating the New Normal in Industrial Countries. International Monetary Fund. 15 December 2010. pp. 12–. ISBN 978-1-4552-1168-5. Retrieved 18 October 2012.
  2. Gomstyn, Alice (15 June 2009). "Finance: Americans adapt to the 'New Normal'". ABC News.
  3. "Is America's high jobless rate the new normal?". BBC News Online. 10 August 2012.
  4. Johnson, Glen (16 October 2012). "Candidates aggressive in 2nd debate". Boston Globe.
  5. Saggu, A. & Anukoonwattaka, W. (2015). "China's 'New Normal': Challenges Ahead for Asia-Pacific Trade". United Nations ESCAP. SSRN 2628613. Missing or empty |url= (help)
  6. "The 'new normal' after coronavirus". (Geographically restricted)
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