The coronavirus pandemic brought entire parts of the economy to a standstill in record time. Here’s why economists say this downturn is unlike any other in U.S. history.
in coming weeks. The unemployment rate, which stood at 3.5% in February, could spike to 15% by the middle of the year, according to Goldman Sachs.The sharpness of the coronavirus-induced economic downturn has brought back memories of previous recessions and even the Great Depression.
The main reason this economic downturn is different from others in history is that it's not the result of instability in the financial system, like in the banking sector in the 1930s, the dot-com bust in the early 2000s or the housing market in the mid-2000s. Instead, the coronavirus economic shock is the result of measures necessary to contain a health crisis, like social distancing and isolation.
"The most important difference is this comes out of the real economy, something biological, and people's choices with responding to that, and not out of financial excess or financial speculation," said Adam Posen, president of the Peterson Institute for International Economics. The challenge now, economists say, is preventing a health crisis from becoming a prolonged financial crisis. The Fed and Congress have put
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