Bridgewater Associates examines how the size, speed, and design of fiscal stimulus shaped economic recoveries during the pandemic. Countries that quickly directed money toward households generally recovered faster, while weaker responses left activity more depressed, suggesting fiscal policy had become an unusually important growth driver.
Fiscal Stimulus Matters More Than Ever: Is It Falling Short?
Bridgewater
Larry Cofsky, Kevin Brennan
Article
1 Pages
Key Takeaways
Fiscal Support Mattered: US fiscal stimulus added an estimated 6.5% to growth, while GDP remained 3.0% below 2019 levels as support began fading.
Canada Boosted Incomes: Household income rose 10% in Q2 as wage subsidies covered 75% of wages and CERB provided $2,000 monthly payments.
Europe Lagged Behind: UK GDP fell more than 20%, while Italy and Spain were each expected to receive EU recovery funding approaching 15% of GDP