Question

Explain the COVID-19 recession severities to the Great Depression and the Great Recession.

Answer 1

COVID-19 recession severities can be acknowledged not only by the lockdown, closure of most of the economic activities, but also loss of more than 50000 human lives in the USA. In contrast to it, the great depression and great recession also created slow down, but economy was still open, people were still doing their jobs and there was no loss of life in such a huge number. Further, the great depression and great recession were driven by faulty policies, poor economic planning as well as policy inaction at the right time in the economy. But, COVID-19 recession is initiated due to coronavirus pandemic and fear of loss of life afterwards. The severities of COVID-19 is there even if the government came up with a stimulus package of more than $3 trillion, and FED working to decrease FFR up to 0% before coronavirus started showing its impact in the USA. Hence, COVID-19 recession severities are magnanimous in nature, in comparison to great depression and great recession of the past.