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Fight the Pandemic, Save the Economy: Lessons from the 1918 Flu (Liberty Street Economics, 6 min read) Areas implementing early and extensive non-pharmaceutical interventions during the Spanish flu saw no medium-term economic damage from the pandemic. By contrast, areas badly hit saw a large and persistent decline in activity.
Back-of-the-Envelope Estimates of Next Quarter’s Unemployment Rate (St Louis Fed, 4 min read) US unemployment could hit 32% (or almost 53mn) by the end of Q2 based on assumptions using data on the number of workers in jobs which are in close proximity to others and on those in jobs deemed to be at high risk.
This Time Truly Is Different (Project Syndicate, 4 min read) The current health crisis is likely to have a bigger economic impact than the global financial crisis and could yet have systemic consequences. Both corporate and EM sovereign balance sheets are weaker than in 2008 and Fed rate cuts are not helping to ease financial conditions in EM given risk aversion and collapsing in oil prices.
Europe’s COVID-19 Crisis and the Fund’s Response (IMF, 3 min read) Most of the nine non-EU emerging economies of CEE have sought IMF help as limited access to capital markets, underdeveloped local markets and less developed banking systems makes it difficult to finance large increases in budget deficits.