Stimulus Can’t Stay Forever, MAS Head Menon Warns

The transcript discusses the measures adopted by central banks globally, focusing on the challenges of unwinding these measures without harming economic recovery. It highlights the optimism surrounding vaccines and their impact on recovery expectations, while cautioning about potential risks like renewed outbreaks and policy missteps. The discussion also covers the sustainability of debt and the role of central banks in future crises, emphasizing the shift towards quantitative easing and asset purchases.

What is a key concern when unwinding economic measures taken during a crisis?

• Ensuring a rapid recovery

• Avoiding a sudden economic downturn

• Increasing government debt

• Reducing interest rates too quickly

How might the availability of a vaccine affect global economic recovery?

• It will immediately restore pre-COVID economic levels

• It will have no impact on economic recovery

• It will contribute to a gradual recovery over time

• It will cause a double-dip recession

What is a major risk to the global economy if policy support is withdrawn too quickly?

• A double-dip recession

• A stronger currency

• Higher unemployment rates

• Increased inflation

What has become the primary tool for central banks in stimulating the economy during a crisis?

• Raising interest rates

• Quantitative easing and asset purchases

• Increasing taxes

• Reducing government spending

What challenge do emerging market economies face regarding debt sustainability?

• Lack of foreign investment

• High inflation rates

• Currency devaluation

• Pressure on interest rates