Thread by @ChinaFinance40

Will the global economy slip into another "#GreatDepression"? The panic over a possible return of the Great Depression is misleading, evidenced by a few key differences: new.cf40.org.cn/uploads/202004… #COVID19

The first difference lies in the monetary system: the gold standard system during the Great Depression hampered monetary policy easing. The room for policy maneuvers is much more spacious at present than during the Great Depression.

Different roles of fiscal policies：stimulus policies lagged seriously behind during Great Depression. After the Great Depression and several financial crises, macroeconomic theories flourished, and government fiscal support was incorporated into the counter-cyclical tool kit.

Trading environment: during GD, global trading system collapsed. Although global trading landscape is undergoing drastic changes and China and US have had on-and-off trade disputes, the severity of these tensions is a far cry from that of the global trade war during GD.

Financial safety net and financial regulatory system: The current financial regulatory system, macro-prudential regulatory system, central bank’s role as lender of last resort and deposit insurance system are all performing their respective functions.

Robustness of the social security system: today,the social security system and unemployment assistance system in the United States have been operating in an orderly manner for many years, which can provide basic support to the unemployed and vulnerable groups in times of crisis.