YETSENGA I am not sure we can have much confidence in the answer to this. These kinds of questions are incredibly important when it comes to what politics is going to look like coming out of this. I don’t think ‘populism’ is the right term, but we seem to use it a lot – and if we thought populism was high going into this, it is going to be much higher coming out given the way policy makers have handled this crisis in some countries.

If we are stuck at zero rates and QE for some period, we know it tends to encourage debt and the buyback of equity. Then the response is to protect business when there is a short, sharp shock – as we have seen offshore. We need to get through this crisis first, and it is looking worse as we go on, but the world afterwards is going to look quite different.

EVANS The only comparable equity market movement that I have experienced was the 1987 crash. The market in 2020 has moved nearly 40 per cent in a month. The 2008 fall was about 50 per cent, but that was over 15 months.

The 1987 crash was very rapid. In response, central banks slashed interest rates and sowed the seeds for a massive commercial property and residential housing bubble that burst and threatened the banking system globally. I suspect that won’t be the case this time because central banks at the time had the scope to slash rates. This time, the stimulus is nowhere near as large so I don’t really expect to see another threatening asset bubble emerge as a result of the monetary and fiscal responses to this crisis.

ONG What we do know is that rates stay low for a long time. We are likely to see some reallocation of capital – we have seen this story a number of times. There will be elements of this going forward. But we also know we have tools in Australia and other parts of the world to deal with asset-price inflation if it emerges again. These tools will be used primarily through the prudential side.

We do not have any choice at the moment but to run the fiscal and monetary ammunition down as much as needed – and there more will be needed to get through this period, as we have all discussed.

There will be consequences, as there always are, but there are tools to deal with this further down the track and we don’t have any other choice right now. If we don’t use it now the economy is going to be in a far worse state. Unemployment will be far higher and there will be much bigger consequences.

NEWNAHA I don’t necessarily see asset inflation as a consequence or potential even if we run loose monetary policy. Have a look at Japan, for instance: the Nikkei has been on a downward trend for multiple decades now.

Going ahead, we will be talking about a pre-COVID and post-COVID era. Investor psychology, as well as that of households, is going to change abruptly.

The problem is going to be stimulating demand in future. For example, we know businesses will not spend if there is no boost in demand. Have a look at 2008-09 and the current situation: people who worked over this period have been psychologically scarred.

Overall, investor psychology will take a hit and this will have a direct impact on the ability to stimulate demand in future and on how successful monetary policy will be over the coming years.