Worst economic depression since the 1930s depression!
The IMF has said that the Coronavirus pandemic has brought about the worst economic depression the world has seen, since the depression of the 1930s.
Barry Eichengreen, an economist at the University of California, Berkeley, a scholar of the Great Depression, said:
“This is a different sort of Great Depression. This is a different kind of shock and it’s playing out in different ways at a very different speed.”
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, said:
“We know after the Great Depression people carried the scars of that experience with them for many, many years. I think the longer that this goes on, the more people who are affected by it, the longer that recovery is going to be.”
Will this really be the worst economic depression the world has seen in a long time?
Gita Gopinath, Chief Economist, I.M.F. said:
“As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been put in a Great Lockdown. The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes. “It is very likely that this year the global economy will experience its worst recession since the Great Depression.”
J.P. Morgan economists wrote in an April 9 research note:
“Even if spending starts to bottom in April, we see little chance of a meaningful pickup in activity in the immediate future. We don’t think that the bottom of the current downturn will occur until May at the earliest.”
James Bullard, President of the Federal Reserve Bank of St. Louis said:
“You really don’t want to go to the quarantine policy unless you have to. The quarantine was maybe the right response initially, but we’re not initially anymore — so it’s not going to be the right response to come back with a global quarantine in the future,” and society shouldn’t “think in terms of rolling quarantines. People say it can’t be done or we don’t have enough resources,” he said. “You really want to ramp that up at all costs and even if somebody gets rich off it or something, you still want to do it.”
Indeed, this does appear to be the worst economic depression since the depression of the 1930s!