Tag Archives: coronavirus

I've run across yet more lazy critiques of Modern Monetary Theory (MMT), arguing that "MMT says governments should just print money to stop the virus!", or similar nonsense. I may only be speaking for myself, my reading of MMT would lead to cautiousness with respect to the limits of fiscal policy at present. Given that we face considerable constraints on output capacity, we can see theoretical inflationary risks if fiscal policy was too active. (My base case view is in line with the...

Economists like to think in terms of demand and supply. Often by assuming the independence of the two, they make huge errors, none the least being when in the 1930s they advocated wage cuts to cure the unemployment arising from the Great Depression, on the assumption that the cuts would reduce costs for firms and encourage them to hire more. But they failed to understand that economy-wide wage cuts would undermine aggregate spending, upon which production decisions, and, ultimately,...

We are starting to more information on how things will play out. Right now, the big question is how closely the other European nations follow the path of Italy, as their case load seems to be just over a week behind. This article will just comment on policy responses, without having a good idea about the timing or magnitude of disruptions.... Bond EconomicsCrisis ResponsesBrian Romanchuk

Guest post by Jeff Mosenkis of Innovations for Poverty Action Thanks for being patient while the links were on hiatus, we’re back! COVID-19 is obviously on everybody’s mind. For the dev crowd, let’s remember that right now travel from US/Europe to the Southern hemisphere might spread the disease to vulnerable places with much weaker health systems.I apologize for not having it handy, but there was a good thread about how the mental model of the poor countries being the source of diseases may...

The Trump administration is reportedly considering the possibility of re-implementing the Defense Production Act. Originally enacted during the Korean War, the Act essentially empowers the President to control the means of production—the idea being that it would be in the interest of the nation's defense to force private manufacturers to focus their production efforts on things that would benefit the country in a time of tenuous resources.... "Reportedly." Rumor maybe, but...

  Update on what is known. A lot remains unknown or unclear, especially in the fog of panic. There is also considerable misinformation. The push is on to isolate the disease to prevent pandemic. This creates an impression that the worst is already happening when it is not. The worst case is a mutating virus and as far as is known, this is not happening — yet.  Let's keep this is perspective though. The likelihood of contracting coronavirus is still very low in most places, and the...