Clark Center Forum

Government support to private firms in the form of debt (either directly or with the help of public guarantees) is desirable, but risks leaving them with too much leverage to invest and grow in the future. Providing funds to viable businesses in the form of equity injections is a vital complement to debt support. With […] 

The balance of federal and local government support to address the economic impact of the crisis has thus far been tilted too much towards supporting firms rather than individuals. Government provision of financial support to firms to keep workers on payroll for the duration of the lockdown will make the recovery faster than if the […] 

This week’s IGM European Economic Experts Panel statements:

Government support to private firms in the form of debt (either directly or with the help of public guarantees) is desirable, but risks leaving them with too much leverage to invest and grow in the future.

Providing funds to viable businesses in the form of equity injections is a vital complement to debt support.

With the EU ban on state aid suspended, government capital injections should be provided via a newly created pan-European equity fund, rather than be left to national governments acting independently. 

Marianne Bertrand, Guglielmo Briscese, Maddalena Grignani, and Salma Nassar This report describes survey results of how a sample of 1400 Americans say are coping with the physical distancing measures, and how this unprecedented crisis might be changing their views about the economy, politics, the role of government, and the future of their country. Read more> 

This week’s IGM Economic Experts Panel statements:

The balance of federal and local government support to address the economic impact of the crisis has thus far been tilted too much towards supporting firms rather than individuals.

Government provision of financial support to firms to keep workers on payroll for the duration of the lockdown will make the recovery faster than if the only recourse for workers to replace income were unemployment insurance. 

Raghuram Rajan Despite occupying such a large share of the world’s attention, Covid-19 continues to impose massive uncertainty about public health and economic wellbeing. How bad will the economic crisis get? Which industries are best positioned to bounce back, and which are facing prolonged hardship? Can policy-makers cooperate across international boundaries given scarce resources? Here’s […] 

Olivier Blanchard and Jean Pisani-Ferry The extraordinary operations that are under way in most countries in response to the COVID-19 shock have raised fears that large-scale monetisation will result in a major inflation episode. This column argues that so far, there is no evidence that central banks have given up, or are preparing to give […] 

Olivier Coibion, Yuriy Gorodnichenko, and Michael Weber The Covid-19 crisis in the US and the policy responses have led to unprecedented numbers of initial claims for unemployment, but there are concerns that total job losses are being understated. This column uses a repeated large-scale survey of households in the Nielsen Homescan panel to show that […] 

Maurice Obstfeld G20 leaders have called for greater international collaboration on the public health response to COVID-19. But this commitment lacked the necessary detail to trigger fast concrete actions and provide guidance and reassurance for citizens. Instead, the leaders tasked health minsters to develop “urgent actions” by April 19-20, 2020. As the virus continues to […] 

Even with the support policies implemented by European governments in response to the crisis, low-income workers will suffer a relatively bigger hit to their incomes than those further up the distribution. With schools across Europe closed in the lockdown, existing gaps in access to quality education between high- and low-income households will be exacerbated. Combating […]