Economic Response to the Epidemic: An Analysis of Macroeconomic Policy in China and the US

The global outbreak of COVID-19 epidemic has instigated turmoil in international financial markets and a severe economic recession. China and the United States have adopted context-specific strategies in response to the pandemic. This research diligently gathers and compares the interventions implemented by each country, with the objective of elucidating the similarities and differences in their methodologies, along with the economic implications of these measures. As the United States is highly market-oriented, the Federal Reserve implements direct monetary policies, along with other fiscal tools by the government. From a formal perspective, the novel monetary policy instruments deployed in both China and the United States operate through the establishment of specialized purpose vehicles. However, the two are still fundamentally different. In policy terms, the Federal Reserves tool is quantitative easing, while China's tool is the traditional category of credit. It can be anticipated that the paths of economic recovery of the two countries will demonstrate a more pronounced divergence trend.