In this report, the Economic Research Institute of the KDB Industrial Bank of Korea wanted to examine economic policy responses from major countries to cope with the economic downturn caused by the COVID-19 and provide suggestions accordingly.

- Major countries are rapidly developing and implementing a wide range of policies as the economic recession is expected due to the spread of Covid-19.

- In the case of the U.S., the Fed is implementing support measures beyond the level of the financial crisis, including unlimited quantitative easing(QE) and the establishment of a liquidity supply organization for the overall economy. The government also prepared measures to preserve the income of workers supported by affected industries and businesses through the largest-ever economic stimulus package.

- In Europe, a joint response has been made, including the expansion of the asset purchase target size and the suspension of the application of financial standards, along with the expansion of liquidity supply in front of banks. In addition, Germany, France and other countries have prepared economic stimulus measures at the individual level, including support for maintaining employment in front of companies and expanding the unemployment support system for supplying liquidity.

- Meanwhile, China is focusing on stimulus through fiscal policy rather than monetary policy. The People's Bank of China is taking a cautious approach to easing monetary policy compared to the U.S., and the government is implementing active fiscal policies on the overall economic players, including measures to promote consumption, such as issuing consumer coupons and subsidies, and reducing costs for companies investing in new infrastructure.

- Japan has not been active in terms of monetary policy due to lack of policy capacity, and has announced the largest-ever economic stimulus package, although it is somewhat delayed compared to other countries.

- Major countries are responding with wartime-like policies taking into account their own situation, and cooperation between monetary policy and fiscal policy has been strengthened. In addition to implementing these policies, we believe that we can improve our ability to respond to similar crises in the future through management and evaluation of policies.