Some economists believe SDRs are a necessary step for providing relief to developing economies and stabilising the world economy. However, some US legislators continue to have inaccurate information and knowledge about the policy.
Dean Baker, senior economist at the Centre for Economic and Policy Research (CEPR), retweeted on a new fact-check based on a recent letter from the Republican Senators to Treasury Secretary Janet Yellen strongly opposing the new issuance of special drawing rights (SDRs) to low- and middle-income economies still grappling with the coronavirus pandemic and its social and economic impact.
According to economists, SDRs are a no-cost tool that can help poor and developing nations bear the worst impacts of the Covid-19 pandemic. And despite them being successfully deployed in the aftermath of the 2009 Great Recession, it is still misunderstood by US legislators.
SDRs form one of the initiatives taken by the International Monetary Fund (IMF) to support 190 low- and middle-income countries with sufficient access to necessities such as medicine, food, and personal protective equipment (PPE) during the pandemic. They are exchangeable between governments, and are a reserve asset of the IMF not costing the US or any member nation any anything.
New fact-check from CEPR shows recent letter from Republican Senators to Treasury Secretary Janet Yellen, strongly opposing a new issuance of #SpecialDrawingRights, is filled with misconceptions and inaccurate information. #SDRs #GlobalCOVIDResponse https://t.co/eSemc6u9p7
— CEPR (@ceprdc) June 21, 2021
Iglika Ivanova, senior economist and public interest researcher at the Canadian Centre for Policy Alternatives (CCPA), retweeted on employment having bounced back since the start of the Covid-19 pandemic in Canada, but the record work disruptions having created large and worrisome long-term unemployment. According to data, the percentage of displaced workers who are long-term unemployed almost tripled between March 2020 and March 2021 from 9.7% to 28.9%.
Consequently, 478,000 Canadians have been unemployed for over six months since the start of the pandemic. Economists state that the Feds need to make employment insurance work provisions more generous in order to help people get back to work.
Canada’s Employment Insurance (EI) programme provides income support to workers who lost their jobs as a result of the pandemic. The programme also supports recently unemployed Canadians, offering them opportunities to new permanent work. For instance, the working-while-on-claim (WWC) provisions helps claimants participate in part-time or casual jobs and still retain a portion of the benefits. The aim is to prevent long-term unemployment. However, a pilot study proved that raised earnings encouraged more claimants to take up temporary work, while eliminated earnings encouraged them to participate in more part-time jobs with more hours and higher pay.
Employment mostly bounced back since the start of the pandemic, but the unprecedented work disruptions created large and worrisome long-term unemployment. The % of displaced workers who are long-term unemployed *tripled* btw March 2020 and March 2021 from 9.7% to 28.9%. 1/5 https://t.co/d7d6oIroP5
— Stephanie Lluis (@StephanieLluis) June 21, 2021
Christophe Barraud, chief economist and strategist at Market Securities, shared an article on Euro area house price developments during the coronavirus pandemic. Economists claim that euro area price dynamics have remained robust during the virus crisis, with the year-on-year house price growth having risen from 4.3% at the end of 2019 to 5.8% in the last quarter of 2020, the highest growth rate since mid-2007.
The pandemic effects have been different from previous crises, experts claim, due to income and employment being relatively stronger. As a result, while growth contracted sharply, house prices held up and have been increasing ever since Covid-19 hit.
— Christophe Barraud🛢 (@C_Barraud) June 21, 2021