Economic Policy Changes in the Great Depression of the United States and the Great Depression of COVID-19

Abstract

Since the COVID-19, the U.S. domestic economy has been hit hard, causing currency devaluation and a dramatic increase in unemployment. Economic policy during the Great Recession and COVID-19 had the impact of stabilizing the economy and saving the unemployment rate. It is of great significance to study the enormous positive and negative effects of these policies on the U.S. and global economies at that time and later. This paper analyzes and contrasts these effects with the support of literature and data. The Fed first changed its stance on rate hikes to cushion economic pressures, and then turned to rate cuts because of escalating trade frictions to sound recession alarms in the market. The spillover effect of U.S. macroeconomic policy adjustment is comprehensive. Affected by the financial hegemony of the United States, not only emerging economies are unable to resist the impact, developed countries are also difficult to escape the 'tail effect'. At present, many countries have government banks in order to avoid devaluation of their currencies, to prevent capital outflows, had to follow the Federal Reserve to make the decision to raise interest rates. The policies aimed at easing have all had a different impact on the U.S. economy and society.