(total reading time: 2 mins)
The US fiscal response to COVID has been one of the largest globally and is a key reason why some are calling for a fairly sharp recovery. But some of the policies could have unintended consequences. In our first Deep Dive, we review two new papers on the supply-side impact of these policies. One focuses on how many could be earning more on emergency unemployment insurance than their current jobs and the other focuses on job reallocation process post COVID. Both suggest that the recovery could more drawn-out as a result.
Our second Deep Dive looks at the impact of leaders actions, versus official health advice, during COVID. Focusing on Brazil, the authors find that President Bolsonaro’s denial of the virus did impact the behaviour of the population, particularly in areas where his support is high.
Finally, we feature our daily COVID tracker.
Supply-Side Perspectives On The Economic Impact Of COVID-19 (4 min read) Most of the discussion on the economic impact of COVID-19 has focused on demand destruction. Yet two recent academic papers, COVID-19 Is Also a Reallocation Shock and US Unemployment Insurance Replacement Rates During the Pandemic, provide an important supply-side perspective. They argue that the recovery will entail substantial reallocation of labour and that the current policy response hinders this reallocation, and they propose changes. Their views help assess the likelihood of a V-shaped recovery…
(Dominique Dwor-Frecaut │ 27th May, 2020)
Speech Can Kill: Bolsonaro And The Social Distancing Experiment (3 min read) When President Trump suggests that injecting disinfectant could cure COVID-19 both health experts and the disinfectant manufacturers quickly came out and refuted the claim. Nevertheless, there was a massive spike in Google searches, a rise in calls to poison control centres, and several people even who consumed it. This highlights how recommendations from political leaders can have a substantial impact on their followers.
Global COVID-19 Tracker – Testing In Danger: Global Shortage Of Reagents In the DM world, the UK and Sweden had a 2% increase in cases. Others barely saw any increases. On deaths, Sweden also saw a 2% increase as well as Japan. Spain saw a 1% increase after yesterday’s surprising drop of 7% – an artefact of Monday’s revised numbers on Covid related deaths…
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