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Are Temporary or Permanent Income Payments Better Placed to Boost Demand during Covid-19?

Author

Listed:
  • Prabhakar Rajiv

    (Economics, The Open University, Milton Keynes, MK7 6AA, UK)

Abstract

Covid-19 has sparked calls for a universal basic income as a way of coping with a demand shock caused by the pandemic. Temporary income payments have been part of the emergency response to the pandemic. This paper questions the effectiveness of temporary payments as a way to raise demand. Some observers claim that vouchers are better targeted at sectors hit hard by Covid-19 as people may have a tendency to save than spend from temporary payments. There may be a stronger case for permanent rather than temporary payments if the aim is to boost demand in the economy.

Suggested Citation

  • Prabhakar Rajiv, 2022. "Are Temporary or Permanent Income Payments Better Placed to Boost Demand during Covid-19?," Basic Income Studies, De Gruyter, vol. 17(1), pages 15-27, June.
    • Handle: RePEc:bpj:bistud:v:17:y:2022:i:1:p:15-27:n:1
    DOI: 10.1515/bis-2020-0022
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