Ben Bernanke, the former chairman of the Federal Reserve, is a scholar of the Great Depression, a context he took advantage of during the global financial crisis when he invented many emergency loan programs as the bank central is currently reusing.
But he thinks the Great Depression is a bad comparison to make with the current economic downturn caused by closings in response to the coronavirus pandemic.
“It’s like a natural disaster, and the response is more like emergency aid than a typical stimulus or anti-recession response. He said he was “fairly satisfied” with the fiscal and monetary responses.
Bernanke’s economic outlook was bleak, however, saying gross domestic product on an annualized basis could fall 30% or more in the second quarter. He suggested that the economy could be partially open in the summer and closed in the fall.
“So, overall, it could be a very bad year for the US economy,” said Bernanke.