Perhaps the most important is the recession’s sectoral impact: manufacturing has hardly been hit but services have suffered drops in activity levels ranging from the severe to the catastrophic. The pattern of post-war recessions has generally been the opposite, with manufacturing suffering severe falls in output while relatively stable service levels provided some much-needed economic support. The unique sectoral impact of this recession raises questions about the policy mix deployed in response. Looking across the western world, the monetary response to recession has been unprecedentedly large and quick. The fiscal response has also been very large and quick, but governments seem already to be eyeing the exit doors to avoid public debt spiralling to dangerously

Source: The Times September 19, 2020 23:03 UTC