The coronavirus is a serious health issue – economic considerations are of secondary importance, but may help mitigate the economic and human consequences of the epidemic

The coronavirus is causing increasing losses of human lives, tragedies, and inconveniences for many people in a growing number of countries. Obviously, the economic consequences are only of secondary importance against this backdrop. However, mitigating the economic costs will help avoid too many further human tragedies such as firm bankruptcies or job losses.

It is still too early to precisely assess the economic consequences of the coronavirus. But obviously, the longer it lasts the more serious will be its consequences. It is now clear that at least in the first half of 2020, not only economic growth in China, but also in the U.S. and many other countries will be considerably affected by the coronavirus. Under a serious scenario, the consequences will last longer. The coronavirus will stay in the world. If I understand the experts in a correct way, there might also be a second wave later this year. Its severity will also depend on the availability of effective treatments.

Below, you find some useful links to various economic analysis. They are of course speculative and rely on different assumptions, but they nevertheless help to get a sense of the potential magnitudes and channels through which the coronavirus will affect the economy:

I highly recommend the free vox eBook edited by Richard Baldwin and Beatrice Weder di Mauro (published on March 6, free but registration is required): https://voxeu.org/content/economics-time-covid-19

Simon Wren-Lewis has an interesting piece that is also accessible for non-economists (published on March 2): https://mainlymacro.blogspot.com/2020/03/the-economic-effects-of-pandemic.html

John Cochrane has some useful thoughts on the effects of monetary policy (published on March 3): https://johnhcochrane.blogspot.com/2020/03/corona-virus-monetary-policy.html

Luca Fornaro and Martin Wolf have a more technical, but useful short paper (published on March 3): http://www.crei.cat/wp-content/uploads/2016/07/CMP.pdf

Jay Shambaugh from Brookings on how the “fiscal response should be” in the United States (at least some aspects are also relevant for other countries): https://www.brookings.edu/blog/up-front/2020/03/03/what-should-a-fiscal-response-to-a-covid-19-outbreak-look-like/

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