Publication:
Macroeconomic Policy in the Time of COVID-19: A Primer for Developing Countries

Simple item page
dc.contributor.authorLoayza, Norman V.
dc.contributor.authorPennings, Steven
dc.date.accessioned2020-04-07T14:18:24Z
dc.date.available2020-04-07T14:18:24Z
dc.date.issued2020-03-26
dc.description.abstractCOVID-19 not only represents a worldwide public health emergency but has become an international economic crisis that could surpass the global financial crisis of 2008–09. Right now, containment and mitigation measures are necessary to limit the spread of the virus and save lives. However, they come at a cost, as shutdowns imply reducing economic activity. These human and economic costs are likely to be larger for developing countries, which generally have lower health care capacity, larger informal sectors, shallower financial markets, less fiscal space, and poorer governance. Policy makers will need to weigh carefully the effectiveness and socioeconomic consequences of containment and mitigation policies, responding to epidemiological evidence on how the virus spreads and trying to avoid unintended consequences. Economic policy in the short term should be focused on providing emergency relief to vulnerable populations and affected businesses. The short-term goal is not to stimulate the economy—which is impossible, given the supply-restricting containment measures, but rather to avoid mass layoffs and bankruptcies. In the medium term, macroeconomic policy should turn to recovery measures, which typically involve monetary and fiscal stimulus. However, in many developing countries, stimulus may be less effective because monetary transmission is weak and fiscal space and fiscal multipliers are often small. A more viable goal for macroeconomic policy in developing countries is avoiding procyclicality, ensuring the continuity of public services for the economy, and supporting the vulnerable. Because COVID-19 is truly a global shock, international coordination is essential, in economic policy,health care and science, and containment and mitigation efforts. Critical times call for well-designed government action and effective public service delivery—preserving, rather than ignoring, the practices for macroeconomic stability and proper governance that serve in good and bad times.en
dc.identifierhttp://documents.worldbank.org/curated/en/951811585836124198/Macroeconomic-Policy-in-the-Time-of-COVID-19-A-Primer-for-Developing-Countries
dc.identifier.doi10.1596/33540
dc.identifier.urihttps://hdl.handle.net/10986/33540
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesResearch and Policy Briefs,no. 28;
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectMACROECONOMIC POLICY
dc.subjectCORONAVIRUS
dc.subjectCOVID-19
dc.subjectMASS LAYOFFS
dc.subjectRECOVERY
dc.subjectECONOMIC SHOCK
dc.subjectRECESSION
dc.subjectUNEMPLOYMENT
dc.subjectLABOR MARKET
dc.subjectFISCAL SPACE
dc.titleMacroeconomic Policy in the Time of COVID-19en
dc.title.subtitleA Primer for Developing Countriesen
dc.typePolicy Noteen
dc.typeDocument de politique généralefr
dc.typeDocumento de políticases
dspace.entity.typePublication
okr.crossref.titleMacroeconomic Policy in the Time of COVID-19
okr.date.disclosure2020-04-05
okr.doctypeEconomic & Sector Work
okr.doctypeEconomic & Sector Work::Policy Note
okr.docurlhttp://documents.worldbank.org/curated/en/951811585836124198/Macroeconomic-Policy-in-the-Time-of-COVID-19-A-Primer-for-Developing-Countries
okr.guid951811585836124198
okr.identifier.doi10.1596/33540
okr.identifier.externaldocumentum090224b0877ad607_1_0
okr.identifier.internaldocumentum31924324
okr.identifier.report147291
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/951811585836124198/pdf/Macroeconomic-Policy-in-the-Time-of-COVID-19-A-Primer-for-Developing-Countries.pdfen
okr.topicMacroeconomics and Economic Growth::Business Cycles and Stabilization Policies
okr.topicMacroeconomics and Economic Growth::Economic Conditions and Volatility
okr.topicMacroeconomics and Economic Growth::Economic Policy, Institutions and Governance
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.topicMacroeconomics and Economic Growth::Macroeconomic Management
okr.unitEFI-EAP-MTI-MacroFiscal-2 (EEAM2)
relation.isAuthorOfPublication83daf4e9-5061-5f1f-b16b-68116394433c
relation.isAuthorOfPublication.latestForDiscovery83daf4e9-5061-5f1f-b16b-68116394433c
Files
Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
Macroeconomic-Policy-in-the-Time-of-COVID-19-A-Primer-for-Developing-Countries.pdf
Size:
738.59 KB
Format:
Adobe Portable Document Format
Download
No Thumbnail Available
Name:
Macroeconomic-Policy-in-the-Time-of-COVID-19-A-Primer-for-Developing-Countries.txt
Size:
106.6 KB
Format:
Plain Text
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description:
Download
Collections
Policy Notes