What components impact the shape of a country's economic recovery? Which are most important?

Question

Quizplus · Accepted Answer

The Answer is The COVID-19 recovery path bifurcates in two directions:
• Large firms and public-sector institutions with direct access to government and central bank stimulus packages
• Small and medium-sized enterprises, blue-collar workers, and the dwindling middle class.
Misallocation of stimulus funds or emergency subsidies makes some areas of the economy recover fast but leaves out others. Businesses with access to government and central bank stimulus are expected to recover faster than small businesses and industries directly affected by COVID-19, such as hospitality. Therefore, when the injected liquidity or subsidies go toward specific industries or market players, it creates greater inequality. Inequality leads to a dip in demand curves and an increase in levels of unemployment and private debt. As unemployment and private debt levels increase, so do defaults. A solution to that problem would be the use of technology. Using technology could help address concerns that are not being addressed by government stimulus packages. It could also ensure that businesses remain operational and shorten the unemployment recovery curve.

What Components Impact the Shape of a Country's Economic Recovery