This year has been unexpected to say the least. Many Americans' lives have been jeopardized by the pandemic similar to many businesses that have likewise been jeopardized. One key thing our government did to try and cushion the blow of the pandemic was the release of the "stimulus checks". The stimulus checks, for the most part, did exactly what the name entails: it stimulated economic growth. However, JPMorgan Asset Management’s David Kelly calls this growth a "steroid kind of recovery" basically meaning that the economic growth will slow during quarter four of 2020. After a recession, economies can see sharp V-Shaped recovery whereas the United States has seen an "interrupted V-Shape recovery" or "half of V" (Kelly, 2020). Basically, the stimulus was a "shot in the arm" for the United States by temporarily fixing the problem. Economic growth is now slowing down due to the absence of a second stimulus. Kelly, in response, believes there will be a second stimulus package after the November elections to bolster economic growth.
Weizent. “Economic Recovery Could Slow in Q4 after 'Steroid of Fiscal Stimulus' Fades, JPMorgan Asset Management Says.” CNBC, CNBC, 22 Oct. 2020, www.cnbc.com/2020/10/22/jpmorgan-asset-management-on-economic-recovery-us-stimulus-talks.html.
I also believe there will be a second stimulus package after the election. Even though politicians are supposed to be representing and making decisions on behalf of the citizens. Both sides are too focused on what they each want that they are letting so much precious time slip away that just as the FED has warned can come back to hurt us even more. I hope that a final decision will be reached soon following the election to help the economy back on the road to recovery.
ReplyDeleteAs we have learned in class, there is only so much we can do in the short run because of fixed variables. These stimulus checks are obviously only temporary fixes, but may help in the long run. Because of these short fixes, people's expectations may rise, causing the economy to be better off in the long run. Of course, there is no way to really know right now the full effect of these stimulus checks.
ReplyDeleteI believe the market is overvalued and there will be a slight correction soon (which is already taking place at this very moment).
ReplyDeletei think the the addition of new stimulus checks will give the economy the boost it needs to fight towards a quicker and more sustainable recovery.
ReplyDeleteGiven the rapid pace of growth in Q3, I don't think the economy can continue to grow at the same pace or anything close to that, especially with the presidential elections on the horizon. Second stimulus checks would definitely help the economy for now, but that doesn't mean it would lead to a speedy recovery. There are many factors that come into play when talking about the recovery of the economy, including things such as consumer confidence, which is currently not high.
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