The dire consequences of the COVID-19 pandemic continue to plague the global economy. Even though the development of vaccines and increased rates of vaccinations, primarily in developed countries, afford distinguishable advantages, new waves of the disease are rattling the cage. For example, while even the U.S. Central Bank (FED) is talking about slowing its purchase of assets, on the one hand, it is seriously perturbed by what the Delta variant, the new strain of the virus, will bring. Under these circumstances, we cannot yet see what lies ahead, which only serves to exacerbate the economic costs.

The Bank of America recently released a report by one of its strategists. The report includes estimates of spending by the central banks to give the economy a boost by purchasing assets since the beginning of the pandemic. According to these estimates, the total expenditure of asset purchasing since the beginning of the pandemic amounts to 834 million dollars per hour for 18 whole months.

Whenever a global economic crisis or a worldwide bottleneck that impacts the economy like the coronavirus pandemic is in question, everyone’s eyes turn to the FED. It’s not surprising, since its policies directly affect the global reserve currency, the dollar in other words. Since the FED’s policies force developing economies like ours to implement their own money policies every now and then, it becomes ever more crucial to predict what the FED will do.

In such a period, the FED has doubled its asset purchases in the last 18 months, increasing its balance sheet to over $8 trillion since the beginning of the pandemic. 

The pandemic was a shock that no global economic administration or central bank saw coming. It is no easy feat to develop a monetary policy to curb the simultaneously emerging supply-demand shock either. Furthermore, the ambiguity of the situation further altered human behavior and spending habits. This being the case, certain monetary and fiscal policies based on old experiences didn’t bear the fruit expected. Nevertheless, it is worth emphasizing that expansionary monetary and fiscal policies work to a certain extent.

On the other hand, despite injecting $834 million into the economy for 18 consecutive months, the end is still not in sight, and we are now grappling with issues such as negative growth and unemployment. To add insult to injury, economies are facing global inflationary pressure, which contradicts the expansionary policies implemented to combat the negative effects of the pandemic on the economy. In a nutshell, global economies will continue to pay the price without knowing to what end, at least for a while.