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Covid-19 Coronavirus and Macroeconomic Policy

Author

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  • Luca Fornaro
  • Martin Wolf

Abstract

As we write, the Covid-19 coronavirus is spreading throughout the globe. Besides its impact on public health, this coronavirus outbreak is likely to have significant economic consequences. The consensus is that the virus will cause a negative supply shock to the world economy, by forcing factories to shut down and disrupting global supply chains (OECD, 2020). But how deep and persistent is this supply disruption going to be? Will aggregate demand be affected? What is the appropriate monetary policy response? What about fiscal policy? These questions are currently at the center of a heated debate.

Suggested Citation

  • Luca Fornaro & Martin Wolf, 2020. "Covid-19 Coronavirus and Macroeconomic Policy," Working Papers 1168, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1168
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    References listed on IDEAS

    as
    1. Guido Lorenzoni, 2009. "A Theory of Demand Shocks," American Economic Review, American Economic Association, vol. 99(5), pages 2050-2084, December.
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    More about this item

    Keywords

    COVID-19;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models

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