Macro policy options to stimulate pandemic-hit economies
The policy brief provides an overview of current monetary and fiscal policy measures to tackle the economic and social consequences of the Covid-19 crisis around the world. It argues that a full economic recovery requires a proper solution to the health crisis in order to be able to remove current confinement and social distancing measures. Moreover, the brief argues that to be successful, countries need to provide sizeable measures to support both supply and demand. Ideally, such support should be provided in the form of universal benefits and grants that maintain economic ties and earnings capacity. Moreover, governments need to mobilize all forms of economic support, using social protection, discretionary fiscal policy measures and monetary interventions. Countries that dispose of less fiscal space should be encouraged to introduce new, innovative approaches, including as regards the administration of their support systems, and be able to call upon the support of the international community. To fully recover from the crisis, governments, businesses and workers will need to add “resilience” to their vocabulary to ensure a sustainable return of economic activity.