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By Caroline Grady 24-03-2020

Claudia Sahm On Direct Payments To Individuals And Other Policy Responses To The COVID-19 Crisis (Macro Musings)

(56 min listen)
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Summary (You can listen to the podcast by clicking here)

Claudia Sahm projects the current shock will be twice as severe as the great recession given activity has shut down and a huge share of the workforce are constrained at home. We must act fast and go big with policy support. We need an array of policies to ensure maximum effectiveness and direct payments are useful as they can get a lot of money into the economy very quickly. But unemployment insurance and food stamps should also be stepped up now. Important that fiscal support must not be taken away too quickly, as was the case in 2008, say until the labour market improves.