POLICY BRIEFS

S20 Saudi Arabia Communique

S20 Saudi Arabia 2020: Read the Communique here.

The US excess mortality rate from COVID-19 is substantially worse than Europe’s

The US has 4% of the world’s population but 21% of the global COVID-19-attributed infections and deaths. This column shows that when comparing excess mortality rates, a more robust way of reporting on pandemic deaths, Europe’s cumulative excess mortality rate from March to July is 28% lower than the US rate, contradicting the Trump administration’s claim that Europe’s rate is 33% higher. The US Northeast – the region most comparable with individual European countries – has experienced substantially worse excess mortality than Europe’s worst-affected countries. Had the US kept its excess mortality rate down to the level in Europe, around 57,800 American lives would have been saved.

Read the article here.

C20 Statement to the G20 Joint Meeting of Ministers of Finance and Health

The C20 is a consortium of more than 850+ civil society organizations from more than 80 countries, that works on relaying the expert opinion of civil society to all G20 streams of work, including a C20 dedicated working group for Global Health and another on International Financial Architecture.
Read the full C20 Statement to G20 Joint Finance-Health Ministers Meeting here.

OECD Digital hub: Tackling coronavirus (COVID‑19): Contributing to a global effort

The OECD is compiling data, analysis and recommendations on a range of topics to address the emerging health, economic and societal crisis, facilitate co-ordination, and contribute to the necessary global action when confronting this enormous collective challenge. This new series brings together policy responses spanning a large range of topics, from health to education and taxes, providing guidance on the short-term measures needed in affected sectors and a specific focus on the vulnerable sectors of society and the economy. Beyond immediate responses, the content aims to provide analysis on the longer-term consequences and impacts, paving the way to recovery with co-ordinated policy responses across countries.
Read more.

The RSA Emergency Basic Income scheme: Cash now for the self-employed

This is part of the RSA’s series of short policy briefings on how to respond to the coronavirus now and build bridges to a better future as part of the recovery.

The RSA Emergency Basic Income scheme: Cash now for the self-employed

By Anthony Painter, Alan Lockey, Fabian Wallace-Stephens (RSA)

Housing and Coronavirus: Responding at Scale

This short briefing is part of the RSA’s series on how to respond to the coronavirus now and bridges to a better future as part of the recovery.

Housing and Coronavirus: Responding at Scale

By Hannah Webster (RSA)

CORONAVIRUS: RESPOND AT SCALE, BUILD BRIDGES TO THE FUTURE

Pandemics reveal structural weaknesses: at pace and scale. And that is precisely what Coronavirus has done over the past few weeks. Deep structural weaknesses have left more vulnerable people and places exposed for some time; now these weaknesses are visible to all.

RSA COVID response – build bridges to the future

By Anthony Painter (RSA)

What COVID-19 Means for International Cooperation

Throughout history, crisis and human progress have often gone hand in hand. While the growing COVID-19 pandemic could strengthen nationalism and isolationism and accelerate the retreat from globalization, the outbreak also could spur a new wave of international cooperation of the sort that emerged after World War II.

COVID-19 may become not only a huge health crisis, but also a crisis of globalization and global governance. Most obviously, it raises the question of how the world should organize itself against the threat of pandemics. But it also has implications for how globalization is perceived and what that perception means for the future of international cooperation.

What COVID-19 Means for International Cooperation

By Kemal Derviş and Sebastian Strauss (Brookings)

The triple economic shock of COVID-19 and priorities for an emergency G20 leaders meeting

Every G-20 Summit host is warned that all the careful planning can be overturned in an instant by a global crisis—trade wars and Ukraine struck Argentina, Syria’s war overshadowed Turkey’s summit, President Trump’s election and dismissal of climate change dominated the German G-20. Saudi Arabia’s planned agenda is now being pushed aside to make room for an emergency G-20 leaders’ meeting in the coming days to deal with the COVID-19 (coronavirus) pandemic.

The triple economic shock of COVID-19 and priorities for an emergency G20 leaders meeting

By Adam Triggs and Homi Kharas (Brookings)

‘Death on an appalling scale’ – David Miliband on the threat of COVID-19 to refugees

Headed by David Miliband, the International Rescue Committee (IRC) works on the ground to improve public health and stop the pandemic from taking root. Prevention is the aim, whether that’s the introduction of handwashing stations, triage centres or isolation units. Without immediate international action to support healthworkers on the frontlines the consequence will be, as Miliband says, “death on an absolutely appalling scale”.

‘Death on an appalling scale’ – David Miliband on the threat of COVID-19 to refugees

By Anna Bruce-Lockhart (World Economic Forum)

The Digital Response to the Outbreak of COVID-19

In every major disaster response, there’s a mobilization of hopeful, well-intentioned actors who try to leverage their professional skills as part of the effort — and among them, there is arguably no industry whose work is more potentially invasive or dangerous during disaster than technology. Undeniably, we need to use technology as part of disaster response, but the regulatory immaturity of the industry has made technology companies risky allies, even in the best of circumstances. And these are not the best of circumstances: more than 200 governments are facing active COVID-19 cases and are using every power, resource and argument at their disposal to advance their interests — only some of which are directly related to COVID-19.

The Digital Response to the Outbreak of COVID-19

By Sean McDonald (CIGI)

The economics of wage compensation and corona loans: Why and how the state should bear most of the economic cost of the COVID lockdown

Due to COVID-19, large parts of the world economy are being put on hold by government fiat. We argue that – on efficiency as well as equity grounds – the state should generously support not only labour but also capital costs, the latter through ex ante partially reimbursable, rapidly disbursed ‘corona loans’. The exact criteria for reimbursement can be determined ex post – depending primarily on the sector-level severity of lockdown-induced income shortfalls.

The economics of wage compensation and corona loans: Why and how the state should bear most of the economic cost of the COVID lockdown

By Jean-Philippe Bonardi, Marius Brülhart, Jean-Pierre Danthine, Eric Jondeau, Dominic Rohner (University of Lausanne)

EU solidarity in exceptional times: Corona transfers instead of Coronabonds

The countries hit hardest by the COVID-19 crisis already have too much debt. Lending from the European Stability Mechanism or via Coronabonds would add to that debt, potentially making it unsustainable. This column suggests that European solidarity should take the form of transfers, not credit. A substantial transfer could be organised via the EU budget simply by exempting the weakest countries from their contributions to the EU budget for the duration of the programming period 2012-2027.

EU Solidarity in Exceptional Times: Corona Transfers instead of Coronabonds

By Daniel Gros (CEPS)

Rescuing the labour market in times of COVID-19: Don’t forget new hires!

The spread of COVID-19 and the ensuing drastic lockdowns are placing economies and labour markets worldwide in a state of emergency. Governments are struggling to safeguard jobs and firms. Short-time work and comprehensive liquidity support for businesses and the self-employed are some measures being used. This column illustrates the consequences of a substantial hiring stall on unemployment and proposes hiring subsidies – directly reduce firms’ costs and thereby stimulate hiring – as a cost-effective stimulus measure for European countries to reduce the risk of unemployment hysteresis effects.

Rescuing the labour market in times of COVID-19: Don’t forget new hires!

By Christian Merkl (University of Erlangen-Nuremberg) and Enzo Weber (University of Regensburg)

The Helicopters Are Coming

With the economic situation in many advanced economies rapidly deteriorating, policymakers are rolling out unprecedented stimulus programs, setting the stage for what amounts to a massive experiment with hitherto unorthodox Modern Monetary Theory. Today’s extraordinary problems, it would seem, require extraordinary solutions.

The Helicopters Are Coming

By Willem H. Buiter (Columbia University)

This is what the economic fallout from coronavirus could look like

The shock to the global economy from COVID-19 has been both faster and more severe than the 2008 global financial crisis (GFC) and even the Great Depression. In those two previous episodes, stock markets collapsed by 50% or more, credit markets froze up, massive bankruptcies followed, unemployment rates soared above 10%, and GDP contracted at an annualized rate of 10% or more. But all of this took around three years to play out. In the current crisis, similarly dire macroeconomic and financial outcomes have materialized in three weeks.

This is what the economic fallout from coronavirus could look like

By Nouriel Roubini (Stern School of Business)

The economic, political and moral case for a European fiscal policy response to COVID-19

There has been a lot of discussion in recent weeks on whether an EU-wide fiscal policy response to COVID-19 should include common liability for the additional debt that such a response would imply. This column lays out the arguments in favour of such an approach – arguments that go beyond economic ones.

The economic, political and moral case for a European fiscal policy response to COVID-19

By Thorsten Beck (Cass Business School)

The Greater Trade Collapse of 2020: Learnings from the 2008-09 Great Trade Collapse

World trade experienced a sudden, severe, and synchronised collapse in 2008 – the steepest drop in recorded history, and the deepest fall since the Great Depression. This column argues that 2020 will show a trade collapse that is far larger since the ‘COVID concussion’ is both a demand shock and a supply shock while the 2008-09 collapse was driven mostly by a demand shock. Key learnings from the last Great Trade Collapse are highlighted.

The Greater Trade Collapse of 2020: Learnings from the 2008-09 Great Trade Collapse

By Richard Baldwin (Graduate Institute Geneva)

COVID, remobilisation and the ‘stringency possibility corridor’: Creating wealth while protecting health

The world is at war with COVID-19; containment policies are a key weapon. But this in not ‘total war’ where trade-offs can be waved off; governments must perform balancing acts. This column argues that instead of thinking of containment stringency as balancing dollars versus deaths, we should think of it as a balancing infections versus tolerability. Containment policies must stay in the ‘corridor’ where they are stringent enough to avoid overwhelming hospitals, but lax enough to avoid overwhelming citizens’ tolerance levels. Solving the dilemma will require an increase in production and a relaxation of constraints – in short, it will involve a partial remobilisation of the workforce. The mission-critical task facing us is to develop a strategy for remobilising workers without risking a medical overload.

COVID, remobilisation and the ‘stringency possibility corridor’: Creating wealth while protecting health

By Richard Baldwin (Graduate Institute Geneva)

The supply side matters: Guns versus butter, COVID-style

“Go big. Act fast. Keep the lights on” is good advice for governments trying to flatten the epidemiological and recession curves simultaneously. This column argues that the combination of containment policies that dampen production and stimulus policies that maintain spending will generate supply-side problems. Cost-push inflation may return, political pressures for price controls and rationing may be irresistible, and governments may find themselves engaged in thinking about production and logistics of the type not undertaken since the 1940s.

The supply side matters: Guns versus butter, COVID-style

By Richard Baldwin (Graduate Institute Geneva)

Building effective short-time work schemes for the COVID-19 crisis

Short-time work is a subsidy for temporary reductions in the number of hours worked in firms affected by temporary shocks. Evidence suggests that it can have large positive effects on employment and can be more effective than unemployment insurance or universal transfers. This column discusses how the COVID-19 crisis – with its mandated reduction in hours of work and massive liquidity crunch for firms – is a textbook case for the use of short-time work. Taking into account available evidence and the current situation, it proposes guidelines to effectively implement short-term work.

Building effective short-time work schemes for the COVID-19 crisis

By Giulia Giupponi (Institute for Fiscal Studies), Camille Landais (London School of Economics)

The labour market policy response to COVID-19 must save aggregate matching capital

The COVID-19 pandemic represents an unprecedented shock to labour markets. This column argues that the policy response should balance two objectives: (1) facilitating prompt reallocation of employment to essential activities during the emergency, and (2) maintaining workers’ attachment to their previous employers, preserving the aggregate stock of firm-specific human capital, and avoiding persistent mismatch, which would propagate the temporary shock into a prolonged stagnation. The authors make concrete labour market policy proposals and compare them with measures currently being implemented on both sides of the Atlantic.

The labour market policy response to COVID-19 must save aggregate matching capital

By Shigeru Fujita (Federal Reserve Bank of Philadelphia), Giuseppe Moscarini (Yale University), Fabien Postel-Vinay (University College London)

Mitigating the work-security trade-off while rebooting the economy

In getting people back to work before a vaccine is developed, policymakers will have to balance medical risks and economic risks. This column presents some calculations on the number of jobs that can be carried out without putting workers at risk of being infected by COVID-19. The findings suggest that the share of jobs that can be performed without putting workers’ health at risk is limited, and probably does not reach 50%. Importantly, this share is even lower in strategic industries that supply the health sector.

Mitigating the work-security trade-off while rebooting the economy

By Tito Boeri (INPS), Alessandro Caiumi (Bocconi University) and Marco Paccagnella (OECD)

Supply chain contagion waves: Thinking ahead on manufacturing ‘contagion and reinfection’ from the COVID concussion

COVID-19 containment policies first shuttered factories in China. Since manufacturers around the world rely on Chinese inputs, Chinese industrial disruption hit other nations via ‘supply-chain contagion’. As China gears back up having mastered the first epidemic wave, the explosions of cases in the two other manufacturing giants, Germany and America, are likely to create reverse supply-chain contagion – the industrial equivalent of reinfection. International coordination may reduce the chances that multiple waves of supply-chain contagion hobble global manufacturing until a vaccine is developed.

Supply chain contagion waves: Thinking ahead on manufacturing ‘contagion and reinfection’ from the COVID concussion

By Richard Baldwin (Graduate Institute Geneva)

Will COVID-19 Remake the World?

No one should expect the pandemic to alter – much less reverse – tendencies that were evident before the crisis. Neoliberalism will continue its slow death, populist autocrats will become even more authoritarian, and the left will continue to struggle to devise a program that appeals to a majority of voters.

Will COVID-19 Remake the World?

By Dani Rodrik (Harvard University – Kennedy School of Government)

The Impact of Covid-19 on Africa’s Trade and Integration

The COVID-19 pandemic continues its indiscriminate and devastating impact across the world and brings a massive economic crisis in its wake. For Africa, this is a development crisis whose impact will be felt for years to come. The spread of the virus has yet to hit African countries with full force, but its effects are already being felt. Many African countries are commodity-dependent and their trade with the rest of the world still exceeds trade with other African countries. Early assessments by the International Monetary Fund (IMF) are clear – the pandemic has pushed the global economy into recession. As global growth slows, so will the demand for Africa’s commodities, like oil, minerals, cacao and coffee. A decline in remittances is also already evident.

The Impact of Covid-19 on Africa’s Trade and Integration

By Trudi Hartzenberg (ISPI)

Covid-19 and Aid to Central Asia: China Shows Off and the US Hiccups

On 26 March, the United States announced a $274 million package for COVID-19-related foreign aid. The investment is directed towards “64 of the most at-risk countries”, with all Central Asian republics included in the list. The move came as a response to China’s success in enchanting public opinion in European countries, sending doctors and material aid to help fight the epidemic, while supporting its more usual partners along the new ‘Health Silk Road’ in both Asia and Africa. With a few spectacular moves, like using the Belt and Road train to Europe to deliver aid to Spain, China is redesigning its international role. At the same time, the US is raising tensions by blaming China for the spread of the disease and denouncing an alleged cover-up of the number of cases in Hubei.

Covid-19 and Aid to Central Asia: China Shows Off and the US Hiccups

By Frank Maracchione (ISPI)

Covid-19 and Italy’s Case Fatality Rate: What’s the Catch?

COVID-19’s lethality in Italy is a highly discussed figure. When compared with other major countries, Italy’s 9.9% case fatality rate (CFR) as of 24 March 2020 is the highest by far. But relying on this figure is misleading. By itself, the CFR tells us almost nothing about COVID-19’s plausible lethality (infected fatality rate, or IFR). On the opposite, recent studies place China’s IFR at 0.7%. By relying on this figure, ISPI’s best estimate for COVID-19’s plausible lethality in Italy is 1.1%. This paper shows that the CFR is an unreliable indicator of COVID-19’s plausible lethality, and there is not enough evidence to suggest that Italy’s IFR is much higher than expected. On the opposite, a direct comparison between the CFR and the IFR is much better placed to paint a more realistic picture of the evolution of the ongoing epidemic.

Covid-19 and Italy’s Case Fatality Rate: What’s the Catch?

By Matteo Villa (ISPI)

The MENA Region vs Covid-19: One Challenge, Common Strategies?

The coronavirus pandemic is the first truly global event of this century. From mainland China, Covid-19 spread quickly to all continents, exposing significant disparities in the responses from different societies and political regimes. The MENA region has been no exception, showing substantial variations in the measures adopted by governments and in the reactions of citizens to the crisis. And while deep uncertainty looms over the medical impact of the coronavirus pandemic in countries with fragile and underfunded healthcare systems, the potential economic and political effects on the region are even more worrisome: especially after a decade of instability and radical transformation. How will these conditions affect regional responses to the crisis? What are MENA governments doing to address the potential impacts of the Covid-19 pandemic? And how is the crisis affecting the geopolitics of the region?

The MENA Region vs Covid-19: One Challenge, Common Strategies?

By Eugenio Dacrema (ISPI)

Coronavirus in Africa: How the Pandemic Will Shape a Continent’s Future

The coronavirus finally arrived in sub-Saharan Africa, one of the last regions of the world to be affected by the pandemic. As much as reasonable arguments have been made with regard to a direct, “specifically African” impact of the virus – due to the likes of climate, median age, population density, human mobility, and so on – the region will not be spared a shocking economic impact. While governments are adopting lockdown measures, often not sustainable for poor people working in the informal sector, fragile health systems struggle to respond to the emergency. How will the pandemic shape Africa’s future? Will African governments be able to effectively tackle the global health crisis and its economic effects?

Coronavirus in Africa: How the Pandemic Will Shape a Continent’s Future

By Giovanni Carbone (ISPI)

COVID-19: Visualizing regional socioeconomic indicators for Europe

The COVID-19 pandemic struck the world out of the blue and displayed unprecedented transmission rates. Part of the reason for its rapid worldwide spread, was the nature of the virus itself, its presentation (symptoms were visible well after a person was infected) and the highly complex, interconnected world we live in today. An equally important contributing factor is our, now apparent, collective inability to deal with a rapidly emerging global threat in a coherent and integrated manner across countries and continents. Our existing multilateral systems are simply not yet geared to respond to such an emerging global challenge in an adequate and timely manner. The plethora of national responses have also been shown to be inadequate.

COVID-19: Visualizing regional socioeconomic indicators for Europe

By Asjad Naqvi (IIASA)

Reducing COVID-19 vulnerability in Latin America and the Caribbean

Together with a group of demographers from Latin America and the Caribbean (LAC), and endorsed by more than 250 individuals from the academic community, I contributed to a statement urging governments, the World Health Organization, and the Pan American Health Organization, to take immediate action to drastically increase the coverage of COVID-19 tests in the region. This call for action was disseminated by the British Society for Population Studies, Asociación Latino Americana de Población, Sociedad Mexicana de Demografía, Associação Brasileira de Estudos Populacionais, and the Population Association of America, among other important institutions.

Reducing COVID-19 vulnerability in Latin America and the Caribbean

By Raquel Guimaraes (IIASA)

COVID-19: Visualizing regional indicators for better decision making

As the COVID-19 pandemic sweeps across the globe, it is fast becoming clear that no one is exempt from its disruptive effects. IIASA researchers are working to visualize key demographic and socioeconomic information to help inform decisions by health professionals, governments, and policymakers to address the crisis.

COVID-19: Visualizing regional indicators for better decision making

By Asjad Naqvi & Ansa Heyl (IIASA)

Will European defence survive Coronavirus?

The tragedy that is the Coronavirus has already claimed too many lives, but it has also allowed Europe’s public services to shine. Citizens across Europe are rightly applauding the tireless work of medical professionals, police and transport workers. Europe’s armed forces have also been called on to roll back the virus. Whether this should be likened to a ‘war’ is open for debate, but Europe’s militaries have mobilised to supply extra hospital space and to support the public through emergency quarantine and hospital capacities and the airlifting of medical equipment.

Will European defence survive Coronavirus?

By Daniel Fiott (Elcano Royal Institute)

COVID-19 in Latin America: political challenges, trials for health systems and economic uncertainty

COVID-19, having emerged in Asia, has shifted its epicentre to Europe and the stage is now set for Latin America (and Africa) to play a prominent role in the next phase of expansion. The pandemic is entering a region that has advantages for combating the disease: it is learning from others’ experiences and is taking drastic steps well before its Asian and European counterparts. It also has clear disadvantages however. First, part of South America, although not Mexico, Central America and the Caribbean, is heading towards the southern winter –something that theoretically favours the spread of the virus–. Secondly, against a background of weaker economic growth, it confronts the crisis equipped with poorer tools, essentially involving inadequate health infrastructure, in the midst of an economic slowdown with politically weak governments and little scope for increasing public spending.

COVID-19 in Latin America: political challenges, trials for health systems and economic uncertainty

By Carlos Malamud & Rogelio Núñez (Elcano Royal Institute)

Coronavirus in Arab countries: passing storm, opportunity for change or regional catastrophe?

The COVID-19 pandemic has spread around the world at a time when the Arab region is under great pressure of various kinds. The responses of the Arab States to the threat of the new coronavirus, added to the international context that the pandemic is generating, have the potential to aggravate some of the existing problems. The current global emergency could turn socio-economic challenges into political crises and intensify the demands for change that are spreading through various countries in the Middle East and the Maghreb. Until an effective vaccine against the pandemic is made available, the economic and social cost of the drastic restrictions being imposed by Arab governments may be overwhelming and, ultimately, unbearable.

Coronavirus in Arab countries: passing storm, opportunity for change or regional catastrophe?

By Haizam Amirah-Fernández (Elcano Royal Institute)

COVID-19 in Southeast Asia: 10 Countries, 10 Responses

COVID-19 pandemic has challenged Southeast Asia, not only directly as a health emergency, but also
within the societal and economic dimensions. The disruption to supply chain, chaos due to restricted
human and goods movement, and severe loss from tourism from some countries have already caused
many Southeast Asian countries to decrease growth expectations for 2020.

COVID-19 in Southeast Asia: 10 Countries, 10 Responses

By Shafiah F. Muhibat (CSIS)

The Military, Policing, and COVID-19

Already today, the U.S. armed forces are providing important help here at home in the struggle against the novel coronavirus. Well over 10,000 members of the Army National Guard and Air Force National Guard have been mobilized to help with things like setting up more hospital capacity, transporting supplies, and providing other logistics. Other personnel, some retired, who have “Individual Ready Reserve” status are in some cases being activated when their particular skills in medicine or other crucial fields can help. They are typically doing so under what is called Title 32 of the U.S. code, whereby they are paid by the federal government but controlled by the governors of the individual states where they operate.

The Military, Policing, and COVID-19

By John R. Allen, John Donohue, Colonel Rick Fuentes, Paul Goldenberg, and Michael E. O’Hanlon (Brookings)

Global stimulus to fight the COVID-19 pandemic

The COVID-19 pandemic has quickly become a severe global crisis, with a drastic spread in less than 2 months and shifts in its epicenter. Almost 1 million people have been infected with the virus around the world, and the number of deaths has shot up rapidly and continues to grow. Although the fatality rate is comparative low, COVID-19’s infection rate is uniquely higher and has spread faster than other deadly viruses, such as SARS, Ebola, and MERS. As of 2 April, the World Health Organization (WHO) has reported 896,450 confirmed cases in 206 countries, areas, and territories around the world, of which there have been 45,693 deaths. The biggest proportion has now shifted from the People’s Republic of China to the United States (US) and Europe, where infection rates have been accelerating remarkably since mid-March.

Global stimulus to fight the COVID-19 pandemic

By Pitchaya Sirivunnabood (ADBI)

Africa after COVID-19 and the retreat of globalism

COVID-19 has brought the world economy to a standstill. It has thrown into stark relief the weaknesses in global institutions and international cooperation and revealed the dark underbelly of globalisation’s promise. Its timing is ‘auspicious’, with a self-centred hegemon, a rising rival great power, a supranational post-modern arrangement that has been buffeted over the last decade by economic and social crises, and a growing attraction by many strong men (they tend to be men) to chauvinistic nationalism. On the other side of the coin, ‘woke’ citizens are mobilising social movements against discrimination (race, gender, poverty and inequality) and against the feeble response of political elites to the realities of climate change. Could this be the perfect storm?

Africa after COVID-19 and the retreat of globalism

By Elizabeth Sidiropoulos (SAIIA)

Coronavirus and African Economies: Are Dominoes Starting to Fall?

Only” 3,778 cases of COVID-19 were recorded in sub-Saharan Africa as of 1 April, according to the WHO. Whether the global pandemic is reaching the continent later or there are reporting challenges, it seems safe to assume that that these numbers will unfortunately rise.

Just like elsewhere in the world, COVID-19 puts Africa in a trying situation. It has the potential to quickly become a human tragedy, given weaker health systems. It is also turning into a deep economic crisis, with countries battling the fallout from the global recession and using their limited fiscal space to meet health needs, support their productive systems and protect jobs, amid high poverty rates and lack of safety nets.

Coronavirus and African Economies: Are Dominoes Starting to Fall?

By Giulia Pellegrini (ISPI)

How Covid-19 Could be Like the Global Financial Crisis (or worse)

How can social scientists help political leaders to design policy responses and mitigation strategies for the COVID-19 economic crisis? To find out read Richard Baldwin´s edited e-book –free to download – in which a range of high-level economists proposes viable solutions. The book includes a piece by our coordinating lead author Nora Lustig, Samuel Z. Stone Professor of Latin American Economics and Director of the Commitment to Equity Institute (CEQ) at Tulane University. This e-book also includes pieces by Paul Krugman, Jason Furman (Obama’s former chief economist) and Olivier Blanchard among many others.

How Covid-19 Could be Like the Global Financial Crisis (or worse)

By Nora Lustig and Jorge Mariscal (IPSP)

The coronavirus pandemic and US consumption

The coronavirus pandemic has triggered unprecedented shocks to both supply and demand, raising important questions about the impact on US consumer spending. In the US, consumption comprised as much as 70% of GDP in 2019. Typically, consumption is less volatile than income. But as this column argues, it is now likely to fall even more than household income. One reason is that part of the negative shock originates in disruption to consumption itself. Another comes from the jump in income insecurity as reflected in an unprecedented rise in the unemployment rate. Other reasons include the fall in asset prices and a sharp contraction in credit availability. A plausible scenario from the analysis suggests that US real consumer spending in the second quarter of 2020 could fall by around 20%, if household labour income falls by 16%.

The coronavirus pandemic and US consumption

By John Muellbauer (VoxEU)

Coronavirus: economic threat, political response and implications

This paper analyses the impact of the coronavirus. It explains why we are facing radical uncertainty that makes it impossible to anticipate the impact of the pandemic, outlines economic policy options to address the crisis and identifies potential lessons to be learned.

Coronavirus: economic threat, political response and implications

By Federico Steinberg (Elcano Royal Institute)

What Can We Do to Manage the Economic Consequences of COVID-19?

A century after the 1918-1920 Spanish flu, we are facing a similar global outbreak. On the one hand, the battle against the disease continues, on the other hand, we are in a situation which requires us to measure the economic impacts and put forward precautionary steps for liberalizing the decision-making process.

Currently, in order to curb the spread and take time saving measures for those managing the process, “social distancing” has been suggested by the authorities as a precaution; consequently, slowing the rate of COVID-19 while a vaccine to control the outbreak can be found. In terms of health, this is the only measure that we have now. Correspondingly, this measure also causes negative economic consequences.

Due to the implementation of social distancing, some workplaces, especially those in the service sector, are closing. Employees have already or are now faced with the risk of losing their jobs. A spontaneous decline in demand is found in hotels, restaurants, public transportation, and civil aviation amongst numerous other portions of the service sector. Likewise, it is clear that there is a high risk of failing to meet mutual obligation in value chains. This is the first point.

What Can We Do to Manage the Economic Consequences of COVID-19?

By Fatih Özatay, Güven Sak (TEPAV)

The fiscal response to the economic fallout from the coronavirus

The various lock-down measures in response to coronavirus have halted economic activity in certain sectors and harshly disrupted others. The resulting job losses and bankruptcies are likely to create major economic strains for millions in Europe and worldwide.

In the euro area, the European Central Bank has reacted with strong monetary policy and supervisory measures announced on 12 and 18 March 2020. Governments throughout the European Union have started to announce and implement various fiscal measures to contain the economic fallout. European state aid rules and fiscal rules have been suspended.

In this dataset we summarise and compare the discretionary fiscal responses of EU countries, the United Kingdom and the United States. We consider only adopted measures. Other measures under discussion will be added to our comparison when adopted.

The fiscal response to the economic fallout from the coronavirus

By Julia Anderson, Enrico Bergamini, Sybrand Brekelmans, Aliénor Cameron, Zsolt Darvas, Marta Domínguez Jíménez (Bruegel)

How COVID-19 will change the nation’s long-term economic trends

Will the coronavirus change everything? While that sentiment feels true to the enormity of the crisis, it likely isn’t quite right, as scholars from the Brookings Metropolitan Policy Program have been exploring since the pandemic began. Instead, the COVID-19 crisis seems poised to accelerate or intensify many economic and metropolitan trends that were already underway, with huge implications of their own. Below, scholars weigh in on COVID-19’s long-term impact on businesses, workers, and the nation as a whole.

How COVID-19 will change the nation’s long-term economic trends

By Mark Muro, Tracy Hadden Loh, Martha Ross, Jenny Schuetz, Annelies Goger, Nicole Bateman, William H. Frey, Joseph Parilla, Sifan Liu, and Adie Tomer (Brookings)

COVID-19 and the Crisis of National Development

COVID-19’s rapid move from warning sign to global pandemic has yanked the spotlight onto a number of questions humanity has been uneasily avoiding for years. Beyond the human-focused ones like how to keep a global economy running when flights are shut down, it has also drawn attention to the human exploitation of ecosystems as national assets, which compels the human–animal interactions that probably made the virus infectious to humans in the first place.

COVID-19 and the Crisis of National Development

By Cobus van Staden (SAIIA)

Infrastructure for Growth Post Covid-19

With the outbreak of the COVID-19 pandemic, governments all over the world are enacting major stimulus packages to confront the health crisis, one of the biggest challenges since the end of the Second World War. But when the pandemic crisis has been tamed, bigger challenges will be waiting, since the major imperative would be to immediately re-launch the global economy.

To this end, investments in infrastructures can be the right instrument to restart the engine.

Infrastructure for Growth Post COVID-19

By Alberto Belladonna (ISPI) and Alessandro Gili (ISPI)

Elaborating Transportation Policy during the Covid-19 Pandemic in Indonesia

The number of COVID-19 cases in Indonesia has reached 172, an increase of 86 times since the first two confirmed cases were announced by President Joko ‘Jokowi’ Widodo on 2 March 2020.

As of 14 March 2020, the Indonesian government has declared the COVID-19 pandemic a national disaster and the President set forth several mitigation measures including a recommendation to ‘work, learn, and worship from/at home’ to reduce the potential spread of this highly contagious disease.

The interpretation of that strategy inevitably influences the transportation sector since the adopted measures should reduce people’s mobility.

Elaborating Transportation Policy during the COVID-19 Pandemic in Indonesia

By Alloysius Joko Purwanto (ERIA)

Are Slums More Vulnerable to the COVID-19 Pandemic: Evidence from Mumbai

India has been highly susceptible to the spread of pandemics. The 1918 pandemic caused devastation across the country, with an excess mortality of 4.5%. While a century has passed since then, the present conditions of dense living and a weak public healthcare system makes the possibility of the rapid spread of the current COVID-19 pandemic and heavy loss of life very real. Crowded and poorer areas, where it is difficult for people to safeguard themselves against getting infected, are likely to see worse outcomes. The case of New York City, where poorer neighbourhoods saw disproportionately more deaths and cases, attests to this. The situation is going to be similar, if not worse, for cities in developing countries like India.

Are Slums More Vulnerable to the COVID-19 Pandemic: Evidence from Mumbai

By Shaonlee Patranabis, Sahil Gandhi, and Vaidehi Tande (Brookings)