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Guardian article on Cornonavirus

Summary:
A fair portion of those who read the blog don’t follow Twitter, so posting this Guardian piece by me here in case you have not seen it.  The headline of the article doesn’t really match the content.  My main point is about the many networks – travelling, supply chain, finance and social media – in the globalized world that are infecting us all with the virus and its economic harm. Central banks do have a role to play;  maximizing monetary stimulus with rate cuts and QE;  perhaps restarting funding for lending;  contemplating private asset purchases in the restarted QE program.  But because they are still dealing with the legacy of the financial crisis, the main burden will fall on the fiscal authorities.  That is, unless drastic measures like helicopter money are contemplated.

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A fair portion of those who read the blog don’t follow Twitter, so posting this Guardian piece by me here in case you have not seen it.  The headline of the article doesn’t really match the content.  My main point is about the many networks – travelling, supply chain, finance and social media – in the globalized world that are infecting us all with the virus and its economic harm.

Central banks do have a role to play;  maximizing monetary stimulus with rate cuts and QE;  perhaps restarting funding for lending;  contemplating private asset purchases in the restarted QE program.  But because they are still dealing with the legacy of the financial crisis, the main burden will fall on the fiscal authorities.  That is, unless drastic measures like helicopter money are contemplated.

Tony Yates
Economist. Consulting, lecturing, a book. Ex Prof at Bham, Ex BoE staffer. Macro, policy, monetary econ, occasional nonsense.

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