The COVID-19 was a triple shock in the world economic system: a demand
shock, a supply shock and a shock in the financial markets. However, the bold
and cautious decisions of the central banks and governments have largely
reduced the economic loss from the crisis and made a quick recovery successful.
The prudent measures taken by the central banks have been successful in
preventing the deterioration of the world economy and a prolonged stress as
seen in the GFC. In this respect, the developed as well as emerging market
economies heavily used non-conventional monetary policy tools such as
quantitative easing, long term lending and forward guidance. The quantitative
easing was used by many emerging market economies for the first time. The
prudent mix of the toolbox and appropriate coordination with the other policies
helped the early recovery in many economies and has safeguarded financial
stability to a large extent. For details see the pdf below.
