We don't understand the covid economy

[Cicada]

This study by economists, including the genius Raj Chetty, opened my eyes. Our problem is sharply reduced spending by the more affluent. Economies opening early saw no economic increase, none. The affluent will start spending only when they feel safe in restaurants and stores. Apparently this was exactly the pattern with the Spanish flu too. The best way to rev up the economy, maybe the only practical way, is to crush the virus.

https://www.vox.com/future-perfect/2020/6/17/21293353/coronavirus-covid-19-economy-recession-unemployment-raj-chetty

[JI7]

1. Also, Isn't it older people that tend to have more money, especially extra spending money ?

And they are the ones more at risk and more likely to stay home.

[judeling]

2. We actually understood it pretty well

The thrust of the individual Fiscal actions was with income. The support was to cover needs so we could almost lay those real-time graphs and maps over the pre-pandemic data and tell what it was going to do. Where the businesses and residents had a higher discretionary spending component would get hit harder, measured by spending. What it shows is that the Monetary actions are having less of an effect.

What we are seeing now is basically the virus putting a cap on economic possibilities. We see this around the world. If you open it up too much you invite a resurgence. China and South Korea are very good examples. The shape of your economy will tell you how far you can go. The more consumer driven the less you can do. So China may get back to 85-90% because its industry is a bigger part, we will probably only get back to 75-80% because we are more consumer driven.