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Care economy crucial – leading macroeconomic influencers

19 Apr 2021 (Last Updated April 19th, 2021 14:19)

Care economy crucial – leading macroeconomic influencers

Leading macroeconomic influencers have shared their anticipations from the policy announcements scheduled for the rest of April, the importance of spending on the care economy, findings of research on the impact of Covid-19 on the Latin American and Caribbean economies, and how stimulus measures are deepening the current account deficit.

Iglika Ivanova

Economist and public interest researcher at Canadian Centre for Policy Alternatives, British Columbia, Iglika Ivanova retweeted a post by economist Armine Yalnizyan in which the latter shared opinion about the importance of the care economy as an economic driver for Canada.

Armine Yalnizyan co-authored an article with four others including academicians from York University and Simon Fraser University, in which the Canadian federal budget, to be presented on Monday, was suggested to include a significant allocation for health and education which together account for 21% of paid employment in the country.

Citing Statistics Canada’s estimates that health and education contribute 12.3% of Canada’s gross domestic product (GDP), Armine Yalnizyan and the co-authors opined that the pandemic further brought to light the importance of spending on care as a stabiliser for the economy during business cycles. They also noted that the care economy is crucial to emerging from the pandemic.

 

Linda Yueh

Linda Yueh, an economist at the University of Oxford, has shared the findings of research by the Inter-American Development Bank that found no trade-off between growth rates and deaths due to Covid-19 in Latin America and the Caribbean.

The views were shared in an article written by Inter-American Development Bank’s Principal Economist, Research Department, Eduardo Cavallo, and Principal Advisor, Research, Andrew Powell.

The research found that the region suffered 25% of the global deaths due to the pandemic although it has just 8% of the global population. Furthermore, the pandemic caused a 7% loss to the GDP, the biggest loss in 200 years.

The duo discussed the impact of the pandemic in detail in various countries within the region, the opportunities emerging from the adverse situation, and what the governments in the region should do to emerge from the crisis and recover their economies.

One of the report’s findings that Linda Yeah highlighted was the low fiscal packages announced in the region, which stood at 8.5% of the GDP, compared to the approximately 19% of the GDP announced by advanced economies on average. More than a third of the countries in the region announced packages 3% or lesser of GDP, which is expected to lead to higher poverty and debt.

Robin Brooks

In a series of tweets, Robin Brooks, chief economist at the Institute of International Finance (IIF), shared his views about the impact of stimulus packages announced by the US and Turkey.

In one of the tweets, Brooks opined that the alarming 3.5% current account deficit of the US excluding oil is a result of a large fiscal stimulus. Turkey’s credit stimulus announcement in 2020 aimed at boosting growth during Covid-19 has caused a deep current account deficit but benefited China and Germany whose exports to Turkey surged due to the stimulus.

In another tweet, Brooks demonstrated how China, whose infrastructure stimulus in 2009 provided huge export opportunities for countries such as Germany and Japan, hasn’t been of significant help this time around during Covid-19.