The week in review: Finding rhyme in reason
23 April 2020
The Coronavirus crisis resembles many of the financial meltdowns of previous eras, but it’s also unique in many respects.
5 min read | 45 min video
The causes would be seen now as a series of policy errors that compounded the ever-worsening economic crisis which only ended with the outbreak of World War II. The stock market didn’t hit a new high until 1954.
The lessons from the past have been learnt. In this crisis, the Federal Reserve and the US Government have done entirely the opposite.The real challenge in the Covid-19 crisis is the scale and speed of the downturn. The enforced closure of significant proportions of the economy results in an unprecedented fall in GDP in a very short space of time.
This is a very different animal to the Great Depression...it came from human problems, monetary and financial shocks that hit the global system... It has some of the same feel, a feel of panic, a feel of volatility, but it’s much closer to a major snowstorm or a natural disaster than a 30’s depression, it’s quite different
Former Chair of Federal Reserve, Ben Bernanke