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Lessons from 2008 and 2020
The nature of the economic disruptions during the Great Recession of 2008-09 and the Pandemic of 2020 were entirely different, and so were the monetary and fiscal policy responses. 2008 was about a financial crisis and involved a rapid deleveraging of the financial system. The pandemic of 2020 was about a forced shutdown of key parts of the service economy. There are important lessons embedded inside the differences in causes of the two recessions and the policy responses. In the 2008 financial crisis, the U.S. Federal Reserve (Fed) moved quickly to purchase over $1 trillion in distressed debt securities in the first ... (full story)