Clark Center Forum

Richard Portes and Torsten Slok What’s going on in the financial markets at the moment, and what does might it mean for the economy? Torsten Slok, chief economist at Deutsche Bank, and Richard Portes of the London Business School, honorary president of the CEPR, explain. Watch video> 

Just two weeks ago, the likelihood of a major US recession as a consequence of the public health challenge was still in doubt. In the past few days, the number of claims filed for unemployment insurance hit record levels; the total number of Covid-19 cases in the United States went past 100,000, already substantially higher than the totals in Italy and China; and parts of the country have imposed lockdowns – closing non-essential businesses and requiring people to stay at home as much as possible. 

This week’s IGM Economic Experts Panel statements on Policy for the COVID-19 Crisis. 

This week’s IGM Economic Experts Panel statements:

A) A comprehensive policy response to the coronavirus will involve tolerating a very large contraction in economic activity until the spread of infections has dropped significantly.

B) Abandoning severe lockdowns at a time when the likelihood of a resurgence in infections remains high will lead to greater total economic damage than sustaining the lockdowns to eliminate the resurgence risk.

C) Optimally, the government would invest more than it is currently doing in expanding treatment capacity through steps such as building temporary hospitals, accelerating testing, making more masks and ventilators, and providing financial incentives for the production of a successful vaccine. 

James H. Stock We are maintaining a weekly economic dashboard, including a real-time index of weekly economic activity here. Data are updated Tuesday and Thursday for the week ending the prior Saturday. The index is calibrated to have the units of a four-quarter moving average of GDP growth. Read more> 

Michael Greenstone and Vishan Nigam As the United States and the rest of the world grapple with COVID-19, the most reliable policy response seems to be social distancing, which itself imposes substantial costs on economies and people’s well-being. Indeed, people have begun to question whether the costs of social distancing exceed its benefits and are […] 

Nicholas Bloom, Philip Bunn, Scarlet Chen, Paul Mizen, Pawel Smietanka The spread of COVID-19 has created an important new source of concern for firms. This column reports the findings of the latest Decision Maker Panel survey of UK CFOs, which show that businesses expected the spread of the virus to have a large impact on […] 

Kenneth L Judd and Karl Schmedders The Senate Covid-19 bill does not offer a coherent rescue plan based on sound economic principles. The key policy goal at this point must be to get cash to corporations quickly, but do so in a manner that does not create new financial problems, does not interfere with corporate […] 

Elena Carletti, Jan Pieter Krahnen et al The COVID-19 pandemic has massive detrimental economic effects and demands immediate policy actions to prevent a financial or debt crisis. This SAFE policy letter from the Leibniz Institute for Financial Research argues that while the fiscal policy responses in Europe have some merit in the short term, they […] 

Jean-Pierre Danthine A large part of the Swiss economy is now at a standstill. How can we prevent this temporary standstill, which will inevitably manifest itself in a decline in GDP over one or two semesters (and thus presumably in a technical recession), from being followed by lasting negative consequences for our material wellbeing? Read […]