#CF40 #MACROECONOMIC POLICY REPORT The Great Depression and Roosevelt’s New Deal by senior fellow Zhang Bin: new.cf40.org.cn/uploads/ZB2020… #COVID19 #novelcoronavirus #economics
The #GreatDepression and Roosevelt’s #NewDeal are very precious historical treasures, of enduring significance to future generations as to avoid great depressions, carry out relief programs,reinvigorate economy &implement reforms.Key measures for the current crisis may include:
1. Maintaining credit growth and preventing deflation are cure for avoiding severe depression. The excessive tightening of credit led to the Great Depression, which ended following the restoration of credit, and economy could not recover from the Great Depression without help.
2. Breaking the doctrine of fiscal balance. Against the background of dropping demand,increased supply will lead to further deflation and make it harder to boost income. To stop declining demand requires credit support while driving up demand through increased fiscal expenditure.
3. Avoiding international trade war. Trade protectionism is detriment to export and will accelerate the deterioration of international credit and debt relations, consequently sabotaging international collaboration in the face of challenging situations.
4. Steering away from new market distortion with targeted relief efforts. Different relief strategies should be in place for different groups, such as introducing monetary relief for the elderly, and providing job opportunities for the young & middle-aged.
5. Policies are about trial and error, with rectification being the key. While the advantages of some policies might outweigh their disadvantages at the time of their conception, as the economy evolved disadvantages will likely outweigh advantages.
6. Focusing on checks and balances of privileges. The idea of checks and balances used to play an active role in mitigating social conflicts and promoting a balanced economic structure.
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