That has helped America bounce back faster in traditional recessions, but this is a different kind of recession, a sudden freeze with no obvious exit.
“The United States had a much larger fiscal stimulus, but as usual, fewer automatic stabilizers, so the discretionary part was bigger,’’ said Lucrezia Reichlin, professor of economics at London Business School. “So in America there is a bigger debate about who is winning and who is losing.’’
Jacob Funk Kirkegaard of the Peterson Institute for International Economics pointed out that because most Europeans don’t have to worry about getting their salaries, the “lockdown was also easier to sustain.’’
That was especially true, he said, for “the critical eight weeks, mid-March to mid-May,’’ when Europe largely succeeded in snuffing out the rapid advance of the virus, which is continuing to spread in the United States at a record pace.
In the United States, “there are a lot of voices clamoring to open up or it will cost us the economy, since there are millions of Americans that need to work to put food on the table,’’ he said. “So Americans were willing to take chances that Europeans did not have to.’’
A lot will depend now on the course of the pandemic.
No doubt, Europeans continue to argue fiercely over the size and shape of their coronavirus recovery fund and how it will be distributed, but by now there is no doubt that the money will be in the pipeline.
If Europe is lucky and can engineer a broad, comprehensive lockdown but a short one, then whenever that money arrives next year will help the economy grow, especially if recovery is slow, weak and prolonged.