UBS' Paul Donovan on U.S. Growth

Paul Donovan, chief economist at UBS, discusses the impact of consumer spending on the US economy, highlighting the role of accumulated savings during lockdowns. He predicts a slowdown in the fourth quarter due to depleted savings and uncertain business investments. Donovan emphasizes the shift towards greater efficiency in asset use, which GDP fails to capture. He argues that fiscal policy, not central banks, should drive economic recovery, as the current downturn is not due to a credit crunch but deliberate government actions.

How has the pandemic changed the way businesses and consumers utilize their assets?

What role do central banks play in the current economic situation as described by Paul Donovan?

What is the significance of fiscal policy in addressing the economic downturn mentioned in the text?