Covid-19 recession vs. 2008 recession

Economist Austan Goolsbee breaks down the biggest differences and similarities for both recessions, and offers hope on how and why our recovery now might be faster than in 2008.
6:20 | 06/22/20

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Transcript for Covid-19 recession vs. 2008 recession
Now I know a lot of you clicked on this video want to know the answer the question will this recession be worse than the Great Recession of 2000. And we will get that but we need a little bit of background force. You've heard it before. A huge bubble first 2008. It ricocheted all around the economy and cause the police. We begin borrowing a lot of money out of our houses and then the housing bubble pops. Five years clawing our way back. Yet back into normal. That the economy's basically back and we commented 21 would cope midnight team. That way if you recessions it's kinda like they were both world that your bathroom but they're very different. 2008. Phil supple forward. It was kind of like your height. She's having a lead. That's rolling poll that slowly coming through the walls there's a lot of damage already done indicated that the coat would reset. It's a little bit. It's not something that was building open walls it's really just there's a clog it up and hopes. Atlanta snapped up to fill up others water just pouring out all over the past. It's a lot easier to fix if you could just yet that clog out of that rain if you just control the culprit by the end. You're in a lot better position. There are a lot old eerie similarities. Between the Great Recession. And Coker recession of one. The first is that the groups that were struggling the most before the section B yeah. People of color and lower income people those are the groups that had hit the hardest. Now that couldn. More than 50% of low income households have personally experienced job walls are already in this case. Sack and the longer these deep recessions last. A harder look at that. I guess people just getting queries called on the approach to government state. So into the. 100820092000. And you saw the rise of the Occupy Movement. Tea Party. And now with hope that you've gotten. People protesting. Against wearing faced man people protesting. Against Lyon county workers and economic shot. It third and fundamental level. A year and withdrawal. Caused both of these days he 2008. It was up mutual. In two thousand twenties. Era of the virus and getting it affected this leading people to withdraw from their normal economic activity. But in both cases. A year after all is what's driving the PNC's. So we know these two giant recessions have their civil liberties but also how they're different. Diversity is this what is much bigger. Than the 2008. Just in terms of intense. Millions more people lost their jobs much more rapidly billions more businesses have closed down and hit point GDP growth. Is going to be a lot larger than it was at the start of the 2000 acres. A second major difference between these two sessions he's really what clause. That Great Recession of 2008 was flaws. Like forces building up with in the can't sell for the cult that recession. It comes out because of something happening nothing to do with the AIDS virus strikes. Because if this outside force he could influence how rapidly the economy is. Byrd. Who has beaten most affected. By these recessions. He's actually completely different. In 2008. The hardest hit sectors of course work construction. Anything related housing plus manufacture. And it tended to be heavier hit point man that way. In 20/20. The biggest hit has been on public sector that we largely thought were recession proved. Like personal services leisure inner pain that health care and things like that. And it's been a lot worse for women than for men. So is the call it recession going to be worse than the recession of 2000. You look at that standard measures all of the point. Income. GDP growth. That warning signs are there that this could be the worst. But just because those signs are there does not mean this task of BA's worst recession. A economists have fought a lot about what kinds of recessions. Come back rapidly. Vs recession that come back slow. And what you want is a rapid rebound. What we call them the shape recovery that it would go down steeply but it will come back just as rapidly. Dan that V shaped recovery. He's definitely better than along the U shaped recovery oral bold or whatever you want like call it where we go oh. And the struggle and it's wrap our way come back. And that you think about the cove a recession. We hope. And maybe even expect. That he could be each that it could come back faster than normal recession. Because the only be handed. From something that was totally outside the economy and out of our control so if you get that they all are back. We can't come back to where we work for the session.

This transcript has been automatically generated and may not be 100% accurate.

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