Unconventional policy options such as ‘helicopter money’ should be on the table, they argue.
Governments will need to reduce personal and corporate bankruptcies, ensure people have money to keep spending even if they’re not working, and increase public investment and healthcare spending, the economists say.
As the list of countries shutting down in the face of the coronavirus pandemic continues to grow, leading economists from around the world are calling for radical action to fight the economic fallout.
More than 40 high-profile economists, including IMF Chief Economist Gita Gopinath and former President Barack Obama’s top economic adviser, Jason Furman, have contributed to an eBook from the Centre for Economic Policy Research (CEPR) in which they urge governments to act quickly and do whatever it takes to keep the lights on.
They advocate using heavy fiscal firepower for a “whatever-it-takes” economic response to the COVID-19 crisis.
Among the drastic measures proposed are: ‘helicopter money,’ where everyone gets a no-strings-attached handout; Eurozone countries using eurobonds to issue debt together rather than individually; and state investment banks providing unlimited emergency lending to firms.
Chosen excerpts by Job Market Monitor. Read the whole story @ COVID-19: How economists think governments should respond | World Economic Forum