One of the world’s biggest learnings from the Great Depression & GFC was how critical the role, type and timing of stimulus is for economic recovery. History tells us that keeping money flowing through the economy gives us a far better chance of avoiding a depression than raising revenue through taxes to keep budgets balanced or keeping money in the bank.
The chart above shows the amount of stimulus from each country. The charts below show the movement in US unemployment during other recessions – and highlights how particularly nasty the covid-19 shut down was.
The good news is April-May seems to be the bottom (in the US) and this is encouraging for companies and therefore investments. The amount of stimulus is significant and will continue to support jobs for the near term.