The Covid-19 Bailout That Big Business Is Lobbying for Could Make America Unrecognizable

Supporting industries is necessary to mitigate the economic impact of the pandemic. But using the coronavirus as an excuse, Boeing and other companies are trying to get taxpayers to foot the bill for their managerial errors. It is not too late to put a limit on corporate subsidies.

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Stick, Carrot, and Evergreen Loans: A Policy Proposal to Save Small and Medium-Sized Firms

Restaurant owners, retailers, and the like employ more than 50 percent of the US workforce, yet neither have cash buffers nor access to Federal Reserve support. In the present situation, we do not need to stimulate new business and spending. Instead, policy nowadays should be aimed at stabilizing impaired balance sheets and avoiding business closures via evergreening.

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How to Interpret Financial Market Movements to Predict the Impact of Coronavirus on GDP

Equity markets in the EU and US dropped by as much as 30 percent, which means that investors have revised downward their estimate of future profits by as much as 30 percent. This leads to an estimate that GDP growth over the next year will be down by 2.6 percent in both the US and the EU. However, investors expect the current crisis to be shorter than the 2008 global financial meltdown. 

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Virus-Enhanced Market Power: American Small Businesses Are Kept Hostages by Amazon

Amazon announced restrictions on the type of merchandise it will allow sellers and vendors to send into its warehouses because Amazon’s fulfillment services (FBA) has reached its maximum capacity in light of the evolving crisis. Amazon’s failure to make necessary adjustments might jeopardize the economic prospects of tens of thousands of firms that rely on its platform on the eve of a recession.

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How Covid-19 Infected Global Financial Markets: a Webinar

Princeton Professor Markus Brunnermeier and Torsten Slok, Chief Economist for Deutsche Bank Securities, discuss what happened during Wall Street’s worst week since the 2008 financial crisis. Did financial markets overact to recent news on the coronavirus outbreak and its economic consequences, or did they simply react accordingly? Should governments restore funding by bypassing the financial sector?

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“This Crisis Is Different: the Coronavirus Is a Social Disease Which We Need to Tackle as a Community”

In an extensive interview, former Governor of the Reserve Bank of India and Chicago Booth professor Raghuram Rajan discusses the pandemic’s impact on financial markets and policy reactions. “Monetary policy can be useful in providing some confidence. But targeted measures, both against the spread of the virus and against the consequences of the disease, are really the first element of government action”.  

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The Electoral Effect of the Virus: How the Coronavirus Is Impacting Democratic Primaries

Compared to 2016, turnout was 22 percent higher (on average) for states voting on Super Tuesday, before Covid-19 emergency measures in the United States. This week, the situation changed dramatically: Average growth across states voting on March 17th was just 3 percent. Here’s how States can promote health-conscious participation in elections and what we can learn from the 1918 Spanish Influenza.   

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What the European Union Can Do to Overcome Liquidity Shortages for Firms

European institutions can mitigate the negative impact of the coronavirus crisis: the European Investment Bank (EIB) can borrow from the European Central Bank (ECB) and extend loans at a favorable interest rate to firms strapped for cash. EU member states’ national tax authorities would then, over a period of a few years, collect the revenues to recover the loan and pay back the EIB.

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Why Mass Testing Is Crucial: the US Should Study the Veneto Model to Fight Covid-19

The Italian experience suggests that locking downtowns is a necessary but insufficient condition to stop the spread of the disease. If 50 percent of the infected are asymptomatic, there is no hope of containing the disease unless we subject ourselves to massive testing. On February 22, 3 percent of the inhabitants of Vo Euganeo, a small town close to Padua, were infected. After two weeks in which the town was locked down and a massive testing program applied, only 0.25 percent were infected.

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Populism Weakened the Immune System of Our Democracies. Chile Is an Example

Modern societies have developed immune systems to deal with epidemics: international cooperation, social cohesion, universal health care systems. But today we face the greatest planetary emergency since World War II with these immune systems severely weakened: populist nationalisms disrupt international cooperation and promote every-man-for-himself, and the anti-science wave infects the debate with irrationality.

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