The fiscal response to COVID-19 is increasing by the day. Several countries have now announced multiple packages after it became apparent that the initial amounts were inadequate given the size of the shock. Many central banks have also acted to ensure additional liquidity is available to the banking sector and some are now directly buying corporate debt. But despite several pledges to do ‘whatever it takes’ to support the economy during the novel coronavirus outbreak, the effective fiscal stimulus currently in place is not as big as the headline numbers suggest.
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