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In Avengers Infinity Wars the villain snaps his fingers and wipes out 50% of all living creatures.

His rationale is that it will save people from starvation and collapse due to resource exhaustion in a finite universe.

Presumably the impact of the loss of half the workforce and half the consumers would threaten to implode the economy as many markets would effectively lose half their consumers.

Assuming governments and industry were able to in some way function after the snap, would they reach for the tools they're used to deploying in economic downturns and try to stablise the economy through a massive stimulus package to fill the gap left by the missing consumers?

Would the intent of such a stimulus be to permanently negate the snap by enabling the remaining population to consume double the resources they previously did? Would it be successful?

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    $\begingroup$ I'm voting to close this question as off-topic because it is about an impossible hypothetical. $\endgroup$
    – Giskard
    Jun 19, 2019 at 6:59
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    $\begingroup$ I would argue that hypotheticals are used all the time in learning and are a useful tool for understanding underlying principles $\endgroup$
    – ChrisJ
    Jun 19, 2019 at 8:18
  • $\begingroup$ Sure, but not unrealistic hypotheticals with hard to define circumstances. E.g. in biology they do not ask you about the diet Thor needs to sustain his muscles because he is an alien organism with undefined properties. If we go very far from reality models are not very useful. $\endgroup$
    – Giskard
    Jun 19, 2019 at 10:32
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    $\begingroup$ But the boundaries of this problem are well defined: 50% of the workforce and consumers are removed from the economy overnight. There exist viruses that are fast acting and have a fatality rate of 50%. Would the question be acceptable if I replaced Thor with a terrorist organisation deploying a weaponised version of such a virus in a coordinated global attack? $\endgroup$
    – ChrisJ
    Jun 19, 2019 at 17:24
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    $\begingroup$ The question is too probably too vague. Although I am a believer in the effectiveness of stimulus programmes, output would obviously fall a lot if half the workforce disappeared, no matter what the government does. What else would you expect? $\endgroup$
    – Brian Romanchuk
    Jun 19, 2019 at 18:12

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Let's break the problem into two parts.

Part one is the negative shocks to supply and demand from half the consumers and half the producers never coming back. This is a permanent negative real shock, and it isn't clear that the government can do much about those with fiscal or monetary policy. The Avengers Endgame movie also suggests widespread and long lasting mental health issues that the government might have a helpful role in mitigating. One could also imagine changes in immigration policy now that a substantial number of homes are now vacant. With an infrastructure base built for twice as many people resources could be redirected to other purposes. However, in the long run things should be largely neutral. The US had half as many people in 1950 and the economy functioned.

Part two is the transitory shocks from disruption from some companies or teams losing members and being unable to produce. It is possible that the government could mitigate the disruption by lowering interest rates, cutting taxes, and resorting to other forms of emergency transfers (like perhaps opening the strategic petroleum reserves or changing federal law enforcement priorities to allow federal police to assist with local matters). They might also try to stabilize a banking system where almost half of consumer loans were never to be repaid. Some resources might also be redirected to handle the abandoned housing, cars, and other infrastructure and millions of abandoned pets and livestock would need assistance.

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