Extended Essays 2021

Table 4 (Rohrer, et al., 2021): The Real Gross Domestic Product change (in billion) for the

2020 economic crisis

Year

Q1

Q2

Q3

Q4

2020

18951.992

17258.205

18560.774

18767.778

2021

19055.655

19358.176

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Compared with the financial crisis period, the timing chain from policy formulation to

implementation of the Central Bank of the United States in the coronavirus epidemic was

significantly shortened, and the policy strength and tool innovation were significantly higher

than those in the financial crisis period. For the economic crisis in 2008, the government

adopted relaxation policies and a longer period to recover the economy gradually. Some

policies even took 6 to 10 years to achieve the ultimate purpose. However, the characteristics

of the 2020 policy are rapid and substantial. Through the change of real GDP shown in Table

4, it can be directly observed that they only achieved the goal in a short period of 3 months

through Q2, making GDP recover. In just three months, the Fed's asset purchases were close

to the total size of the four rounds of quantitative easing after the financial crisis. On 15

March 2020, at the end of Q1, the Federal Reserve announced a quantitative easing policy of

$700 billion. On 23 March, start the unlimited quantitative easing policy, and the market

starts reacting in Q2 and successful recovery to the actual GDP. However, since the Federal

Reserve canceled the quantitative easing in April, the policy is still affecting and it even

exceeded the previous year in 2021 achieves $19055.655 billion.

However, compared with the easing policy of the United States, which has achieved

remarkable results in only three months in 2020. For the economic crisis in 2008, the U.S.

Federal Reserve took six years to issued three rounds of quantitative easing policies

successively from the end of 2008 to October 2014, with a total purchase of assets of

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