ECONOMY FORUM: When members of the US Federal Reserve met in late January, they expressed confidence in the country’s ability to stretch a record run of economic growth and job gains well into 2020. Indeed, 2019 had seen strong performance in certain indicators, including rising real incomes among lower-earners. Two months later, the US was in a coronavirus lockdown, and the economy was in freefall. Some 34million jobs have been lost, and GDP is expected to decline by 35% or more in the second quarter. What are the prospects for the US economy to recover? Pre-Covid, was the economy as robust as commentators claimed? Does the crisis provide an opportunity for the US to address its weaknesses? Will government spending have a positive effect, or will a debt overhang be an obstacle to recovery? Will the Fed’s easy money policy work? And, what will the US’s economic problems mean for the world economy? James Matthews introduces.
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