Welcome to Thoughts on the Market. I'm Chetanaya, Chief Economist for Morgan Stanley.

And I'm Andrew Sheets, Chief Cross Asset Strategy at Morgan Stanley, and welcome back to

Part 2 of the special edition of Thoughts in the Market, where we'll be talking

about the impact of the coronavirus pandemic on the global economy and the effect on markets

longer term.

It's Friday, May 8th at 11 a.m. Eastern time.

So Andrew, how should an investor evaluate this issue of high levels of debt around the world,

especially in the DiM world?

So it's a really interesting debate because as you mentioned we're looking at debt and deficit levels that really have very few

comparisons in history even going back a very long period of time.

I think the irony, though, is that I think, based on the investors that I speak to,

most investors would probably prefer and think it would be a better thing for the economy and the markets for governments to do more to support the economy even if that means more borrowing, then do less.

And I think you need to look no further than investors' views towards Europe,

where I think generally you've seen stock markets there lag.

I think you've seen investors generally and probably correctly

be more cautious on European assets and one of the reasons for that is that Europe has been more

reluctant to borrow more to support its economy.

So I think it's something that's getting a lot of focus,

but I think you're looking below the surface

in terms of where investors' preferences really lie, I think actually at the moment investors

would probably prefer, you know, more borrowing, more stimulus, more economic support than less.

Yeah, Andrew, as an economist, I would also think that that response is the correct response

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