Thread by @ChinaFinance40

A recent article by CF40 member Wu Ge on the global impact of the #novelcoronavirus and policy room: cf40.org.cn/uploads/202003…

Various indicators have shown that the impact of the epidemic on the global economy is comparable to that of the subprime mortgage crisis.

Compared with the worst period of the subprime mortgage crisis, corporate income in China in the first quarter this year will likely decline by a larger margin, especially for service sectors such as catering, tourism, retail and real estate.

Compared with the subprime mortgage crisis, the room for policymakers to adjust aggregate demand has significantly narrowed in many economies.

From the perspective of fiscal policy, government leverage in many countries was still low prior to the subprime mortgage crisis, after which it has remained at high levels, largely reducing the effect of fiscal policy as a result.

At present, Chinese policymakers are still focusing on structural measures to promote work resumption. As the epidemic gradually comes to an end, countercyclical policies are expected to be further strengthened as internal and external economic pressures continue to increase.