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Why Cash Transfers Are Good Policy in the COVID-19 Pandemic

Author

Listed:
  • R. Anton Braun
  • Daisuke Ikeda

Abstract

The COVID-19 pandemic has had an exceptionally large and negative impact on economic activity around the world. We show that cash transfers can be a useful policy tool during a pandemic. Cash transfers mitigate consumption inequality induced by the pandemic and provide incentives to individuals who are most negatively affected by lockdown policies to adhere to them.

Suggested Citation

  • R. Anton Braun & Daisuke Ikeda, 2020. "Why Cash Transfers Are Good Policy in the COVID-19 Pandemic," Policy Hub 2020-4, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:a00001:87974
    DOI: 10.29338/ph2020-04
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    File URL: https://www.frbatlanta.org/-/media/documents/research/publications/policy-hub/2020/05/14/why-cash-transfers-are-good-policy-in-the-covid-19-pandemic.pdf
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    References listed on IDEAS

    as
    1. Hara, Ryota & Unayama, Takashi & Weidner, Justin, 2016. "The wealthy hand to mouth in Japan," Economics Letters, Elsevier, vol. 141(C), pages 52-54.
    2. Martin S. Eichenbaum & Sergio Rebelo & Mathias Trabandt, 2020. "The Macroeconomics of Epidemics," NBER Working Papers 26882, National Bureau of Economic Research, Inc.
    3. R. Anton Braun & Daisuke Ikeda & Douglas H. Joines, 2009. "The Saving Rate In Japan: Why It Has Fallen And Why It Will Remain Low," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 291-321, February.
    4. KITAO Sagiri & YAMADA Tomoaki, 2019. "Dimensions of Inequality in Japan: Distributions of Earnings, Income and Wealth between 1984 and 2014," Discussion papers 19034, Research Institute of Economy, Trade and Industry (RIETI).
    5. Maryam Farboodi & Gregor Jarosch & Robert Shimer, 2020. "Internal and External Effects of Social Distancing in a Pandemic," NBER Working Papers 27059, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Economic policy > Household income support

    More about this item

    Keywords

    COVID-19 pandemic; cash transfers; stimulus payments; inequality;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid

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