“The #novelcoronavirus outbreak is far from over worldwide, so our current task is not to conclude or reflect on it. Rather, we should draw on past experiences and theories to provide reference to our policy response,” said CF40 Advisor Cai Fang in a recent article.
This article summarizes several stylized facts about the impact of the pandemic and its countermeasures: new.cf40.org.cn/uploads/202004…
1) there is no policy overreaction. According to historical experience, policy response leans toward conservative stances in most cases, and often appears to be passive in keeping with real needs. So in hindsight, there is no so-called "overreaction" in any policy response.
2) macroeconomic policies should be chosen based on the nature of shocks.The economic shock caused by #covid19 is twofold-the shock affects real economy from both demand&supply sides,consecutively or simultaneously,which is reflected correspondingly in financial&commodity markets
3) not everyone is equal in the face of the shocks. In the outbreak of the novel coronavirus, low-income countries and groups face a greater chance to bear the brunt and their lives and health face more threats because they do not have sound medical care conditions.
4) fiscal policy should play a central role in macro control. Large-scale fiscal expenditure used to ensure social insurance payments and social rescue is far more important and targeted than ensuring sufficient liquidity in the financial sector.
5) the path of economic recovery is dependent on the epidemiological curves. It is necessary to choose the right timing to launch policies, otherwise the expected results may not be achieved.
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