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July 29, 2020

Why economic stimulus packages need to focus on future growth

By Paul Dennis

29 July

As the US government deliberates on the next stimulus package, experts urge the need for a sustainable fiscal policy that can promote economic growth.

Mohamed A. El-Erian, chief economic adviser at Allianz, shared an article on his outlook for the US economy.

He noted that policy makers should not repeat the same solutions to deal with the economic crisis caused by the Covid-19 pandemic.

The solutions should rather focus on promoting economic growth in the future.

The US economy showed signs of recovery in June as retail and home sales increased but later flattened out as lockdown restrictions were re-imposed.

El-Erian noted that the government should offer more money to states to cover the revenue lost due to the pandemic.

He also noted that testing and healthcare should be improved to bring the infection rate under control.

In other news: Unemployment levels have been rising across the world impacting the earnings of the future generations.

Gregory Daco, chief US economist at Oxford Economics, shared an article on how the pandemic is expected to impact the earnings of future generations in Canada.

The unemployment rate for youth increased from 10.3% in February to a historical high of 29.4% in May.

The current year’s high school, college and bachelor degree graduates are expected to lose approximately $25,000 or more over the next five years.

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