The following table shows the five possible economic consequences of Y2K along with my subjective probability. Business as usual. Only a few problems, which will be fixed rapidly. Stock market moves much higher. Business as usual within a few weeks.
Stock market moves higher.
Flight to quality. Social and political upheaval. This would depress stock prices, which would depress consumer confidence and spending, thus exacerbating the Y2K recession effects attributable to supply disruptions. The worst of the forecasted recession should occur during the first six months of next year. It is likely to linger during the second half of the year, though there should be clear signs by then that the worst is over and lots of signs of a recovery.