Economic recovery options and challenges : hearing before the Committee on the Budget, House of Representatives, One Hundred Tenth Congress, second session, hearing held in Washington, DC, October 20, 2008.

Economic recovery options and challenges: hearing before the Committee on the Budget, House of Representatives, One Hundred Tenth Congress, second session, hearing held in Washington, DC, October 20, 2008.

A large percentage of workers and firms operate in the informal economy, outside the line of sight of governments in emerging market and developing economies. This may hold back the recovery in these economies from the deep recessions caused by the COVID-19 pandemic--unless governments adopt a broad set of policies to address the challenges of widespread informality. This study is the first comprehensive analysis of the extent of informality and its implications for a durable economic recovery and for long-term development. It finds that pervasive informality is associated with significantly weaker economic outcomes--including lower government resources to combat recessions, lower per capita incomes, greater poverty, less financial development, and weaker investment and productivity.

The slowdown of economic activity was moderate through the first half of 2008, but at that point the weakening economy was overtaken by a major financial crisis that would exacerbate the economic weakness and accelerate the decline. Recent evidence suggests that the process of economic recovery has begun. On the other hand, significant economic weakness remains evident, particularly in the labour and housing markets. This book examines the current issues, options and impacts of the U.S. economic recovery and stimulus measures.