Although every recession is different, history offers lessons for the current pandemic-induced downturn. Amid so much uncertainty, policymakers should focus on keeping taxes low, developing plans for fiscal consolidation, and avoiding new regulations until the economy is back on track.
STANFORD – The historically deep COVID-19 recession appears to have turned the corner in most countries. But current private and official forecasts, if correct, imply that most economies will not return to their previous performance peaks until late 2022. Much will depend not only on the evolution of the pandemic and effective therapeutic and vaccine deployment, but also on the monetary, fiscal, trade, and regulatory policies that are pursued. Policymakers and commentators are thus examining previous episodes in search of an effective response.
STANFORD – The historically deep COVID-19 recession appears to have turned the corner in most countries. But current private and official forecasts, if correct, imply that most economies will not return to their previous performance peaks until late 2022. Much will depend not only on the evolution of the pandemic and effective therapeutic and vaccine deployment, but also on the monetary, fiscal, trade, and regulatory policies that are pursued. Policymakers and commentators are thus examining previous episodes in search of an effective response.