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Getting Serious about the Economic Response to COVID-19

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Getting Serious about the Economic Response to COVID-19

EPI,

5 min read
3 take-aways
Audio & text

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Economic policy responses to COVID-19 must address the kind of recession it might cause.

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Anxiety over the potential US economic fallout from the COVID-19 epidemic continues to mount. In this concise briefing, economist Josh Bivens offers policy officials some sober advice on how to tailor their responses to the particular aspects of a coronavirus-driven recession. His astute paper looks into how, much like the virus itself, a potential downturn could spring up suddenly, affect low-income people the most, and have an excessive effect on state and local governments. 

Summary

A COVID-19 recession would come on fast in the United States.

Recessions differ in their causes and effects, and each requires a distinctive mix of responses. For instance, the 2008 Great Recession, brought on by an ongoing housing bubble, needed long-term remedies. In contrast, an economic fallout from an infectious disease like COVID-19 needs immediate relief. It’s crucial for policy makers to think clearly about their responses. Ideological proposals like tax and regulatory cuts have little to do with a looming health crisis and its consequences.

About the Author

Josh Bivens is the director of  research at the Economic Policy Institute.

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