Governments across the world introduced various policies such as unemployment benefits, and tax deferrals to enable people to deal with the impact caused by the Covid-19 lockdowns. As countries begin to reopen their economies, it is essential that governments introduce new policy changes that enable them to adjust to the new normal.
Adam Posen, president of Peterson Institute for International Economics, shared an article on the need for a new policy toolkit as lockdown measures are lifted across the world. The article notes that some measures adopted during the lockdown such as employment benefits, grants and loans will come to an end.
In this environment, policy makers need to take into account the uncertainty facing the economies due to the Covid-19 pandemic, the article adds. Governments should design new policies that enable people to adjust to the new changes after the lockdown is lifted. A combination of unemployment benefits and pay cuts, tax deferrals and guaranteed loans are some policies that governments can consider.
Details & generosity of job retention schemes differ, but the essentials are alike: Employees on furlough keep contracts with their employers & take a small pay cut; the government pays the largest part or the entirety of the cost to the employers. More: https://t.co/VVm4NPaEz9 pic.twitter.com/ryM6jwbIxA
— Peterson Institute (@PIIE) June 14, 2020
Prof. Steve Hanke
Prof. Steve Hanke, applied economist at Johns Hopkins, shared a chart on how the worst of the Covid-19 crisis is yet to come for South Asia. Testing for Covid-19 is low and the region is known for manipulation by the government about the actual numbers.
Hanke noted that the region is unlikely to avoid a future Covid-19 crisis barring Singapore, which is known for its small and efficient government.
The @HudsonInstitute believes the worst may be yet to come for #SouthAsia. Because of low #Coronavirus testing and government manipulation, the region is unlikely to avoid a future #Crisis. The only outlier remains #Singapore, known for its small, efficient govt. pic.twitter.com/e6XjZmE4FV
— Steve Hanke (@steve_hanke) June 13, 2020
Daniel Lacalle, author and chief economist at Tressis SV, shared a chart on how massive liquidity cannot disguise a solvency problem in the US. The chart shows the corporate bond defaults for the second quarter of 2020.
Defaults were at multi-year high levels particularly in May 2020, according to the chart.
Massive liquidity cannot disguise a solvency problem.
— Daniel Lacalle (@dlacalle_IA) June 14, 2020
Timothy McBride, Bernard Becker Professor at Washington University, shared an article on the lockdown imposed in Beijing amid fears of a second wave of Covid-19 outbreak. The lockdown was imposed following a new outbreak at the Xinfadi food market in Beijing.
The new cases were reported after nearly 55 days of no new cases being reported in the country. The article noted that this new outbreak should serve as a warning for other countries that are reopening their economies. The need to take the necessary precautions and maintaining social distancing was stressed in the article.