We are experiencing a substantial de-leveraging of the financial system, which will have an impact on the real economy. I will come back to this issue shortly. Second, the dramatic drop in economic activity could have lingering effects on potential and actual output.
There are several sectors of the economy where activity is unlikely to return to pre-crisis levels because of structural shifts in the composition of world demand or permanent changes in relative prices. The construction and automotive sectors are perhaps the most obvious examples.