Central banks of various economies have injected new money into financial markets to deal with the economic downturn caused by the Covid-19 pandemic. These actions although useful may not be enough to post a strong recovery. Investment-led growth policies and long-term investments are essential to reverse some of the damage caused by the pandemic.
Stephany Griffith-Jones, an economist, shared an article on how central banks need to take more action to support economies after the Covid-19 pandemic. G7 nations injected approximately $2.5tn into financial markets in March and April using quantitative easing and liquidity programmes to prevent a collapse in the financial sector.
The article notes that banks need to play a bigger role by lending to sectors that are productive and create more jobs. These jobs also need to be sustainable to create green infrastructure that enables transition towards a zero carbon economy.
IIPP's Head of Finance and Macroeconomics @jryancollins discusses how central banks must do more to support economies after the #Covid19 pandemic. Originally posted on @guardian.https://t.co/MJB2YjeLZf
— Institute for Innovation and Public Purpose (@IIPP_UCL) June 8, 2020
Gregory Daco, Chief US Economist at Oxford Economics, shared an article on a survey conducted among small business owners. The survey results showed that small business owners believed that the recession will be short-lived and were optimistic about a rebound.
Although consumers were still wary of returning to small businesses, owners are taking the necessary precautions to reopen safely. Further, business owners were planning to rehire workers due to the government’s Paycheck Protection Program aimed at saving small businesses and their workers.
"Small business activity should come back to life, but the severity and lingering effects of the #COVID19 crisis also mean that many small businesses won’t survive the recession” via Lydia Boussour @OxfordEconomics https://t.co/t4A9EmkwIp via @jbartash
— Gregory Daco (@GregDaco) June 9, 2020
Adam Posen, President of Peterson Institute for International Economics, shared an article on how China’s unemployment data does not account for those people from rural areas who travel to urban areas for employment. The Covid-19 pandemic has wiped out millions of jobs in the urban areas forcing people to return to their villages.
Despite this data, China’s official unemployment rate has remained stable. Experts have noted that these unemployment figures may not be accurate as it does not take into account those people from rural areas who have been recently unemployed.
China's unemployment data doesn't really take into account those people who travel frequently between the country and the urban areas like migrant workers, Tianlei Huang says. https://t.co/6qe6auIO8M
— Peterson Institute (@PIIE) June 8, 2020
Christophe Barraud, an economist and forecaster, shared an article on the changes made by the Federal Reserve to its Main Street lending program. The Federal Reserve has lowered the minimum loan that can be borrowed and increased the maximum loan that can be borrowed in addition to increasing the loan term to five years.
The new changes are aimed at directing money towards small and medium-sized enterprises that have been affected by the Covid-19 pandemic and achieve a broader economic recovery. These changes are part of a number of new measures being implemented to increase lending and liquidity during the pandemic.
— Christophe Barraud🛢 (@C_Barraud) June 9, 2020