Sandy Tubeuf, 02 December 2020

Once a safe COVID-19 vaccine will become available, there will not be enough supply of it to vaccinate the entire population. Policy makers at national and international level are currently developing vaccine prioritization strategies. However, it is important that these strategies have sufficient levels of public support. Sandy Tubeuf (UC Louvain) discusses her work on how people perceive priority cases for vaccination. Read the Covid Economics paper behind this discussion: Who should get it first? Public preferences for distributing a COVID-19 vaccine by Jeroen Luyten, Sandy Tubeuf , Roselinde Kessels 

Gilbert Cette, Jimmy Lopez, Jacques Mairesse, Giuseppe Nicoletti, 02 December 2020

The COVID-19 crisis has highlighted the importance of the swift reorganisation of tasks and logistics in cushioning economic shocks. While it is too early to study the effects of managerial talent on resilience to the COVID-19 crisis, useful insights can be drawn from the experience of the Great Recession. This column shows that countries with a higher quality of management before the Great Recession have been more able to limit employment losses. This was achieved through the ability to moderate real wage growth.

David Welsch, 01 December 2020

The science behind mask usage and its ability to reduce airborne particles seems clear. Despite this, many individuals are sceptical that wearing masks can reduce the spread of COVID-19 and many refuse to wear one even when required. This column examines the effect of mask usage using county-level data from the US, employing an instrumental variable approach. The findings show that increasing the amount of individuals who frequently or always wear a mask when within six feet of people by 1% could reduce COVID-19 deaths by 10.5%, which translates into approximately six deaths in the average county. 

James Reade, Matthew Olczak, Matthew Yeo, 30 November 2020

The rapid spread of the Covid-19 virus meant that by mid-March 2020, the UK government had stopped outdoor sports from being played in England. Since then, football has resumed behind closed doors, and whether fans should be allowed to attend matches is now the subject of much debate. This column examines whether football matches held in England across February and March helped to spread Covid-19. It finds that attendance at matches resulted in an increase in cases and deaths and concludes that extreme caution should be applied to reopening football to spectators and that there should be close monitoring of any gradual re-opening of stadiums.

Federico Di Pace, Luciana Juvenal, Ivan Petrella, 28 November 2020

The abrupt movements in commodity prices at the onset of the Covid-19 crisis have reignited policymakers’ concerns over movements in the terms of trade. The shock has certainly confirmed that terms of trade are very volatile and extremely sensitive to changes in global economic activity. This column argues that these terms of trade shocks are likely to have a persistent impact on the business cycle of developing economies, which are particularly vulnerable to fluctuations in the price of their exports.  

Christoph Trebesch, 26 November 2020

What are the political costs of mismanaging a Pandemic? Loose pandemic policies are politically costly - governments that placed more weight on health rather than short-term economic outcomes obtained higher approval. Cristoph Trebesch (Kiel Institute for the World Economy, CEPR) talks to Tim Phillips about the findings in his recent Covid Economics paper: Corona politics: The cost of mismanaging pandemics Helios Herrera, Maximilian Konradt, Guillermo Ordoñez and Christoph Trebesch, Covid Economics #50 

Jean-Paul Renne, Guillaume Roussellet, Gustavo Schwenkler, 26 November 2020

Could restrictions at the federal level have slowed the spread of COVID-19 in the US? This column addresses this question using a novel, multi-region epidemiological model that calculates the number of deaths that would have resulted from the federal government mirroring the policies of those states with the earliest and most rigorous restrictions. It finds that by late September 2020, more than two-thirds of the country’s COVID-19 deaths could have been prevented,highlighting the need for unified action from state and federal regulators.

Simeon Djankov, Eva (Yiwen) Zhang, 26 November 2020

The rebound in jobs for men in the US was swift after the initial weeks of the Covid pandemic, but not so for women. This column highlights three areas for change to alleviate the burden on working women in the US. First, legal changes are needed to both federal and state-level regulation, with a particular focus on parental leave and pension rules. Second, vocational training incentives with a particular focus on women are needed. Third, future recovery programmes may do well to take the actual gender pay gap – factoring in unpaid work that women do in the household – into consideration.

Jeroen Luyten, Roselinde Kessels, Sandy Tubeuf, 25 November 2020

With the news of promising Covid-19 vaccines on the horizon comes a new challenge. The initial supply will not be sufficient to vaccinate everyone and choices will need to made over distribution. This column presents the results of an experiment in Belgium investigating people’s preferences regarding the distribution of a scarce vaccine. There was no one single strategy that was considered best by a large majority, but three strategies were ranked first by between 20-30% of respondents: prioritising essential workers, the chronically ill, and older people. Libertarian-inspired approaches (such as highest willingness-to-pay or ‘first-come, first served’) and a strict egalitarian approach (such as a lottery) were clearly the least preferred options.

Bernard Hoekman, Anirudh Shingal, Varun Eknath, Viktoriya Ereshchenko, 25 November 2020

A prominent feature of the public policy response to COVID-19 has been the active use of trade policy instruments to enable access to essential supplies. This column finds the use of export restrictions targeting medical products to be strongly positively correlated with characteristics of prevailing public procurement regimes. Membership of trade agreements encompassing public procurement disciplines is associated with actions to facilitate trade in medical products. These findings suggest that future empirical assessments of trade policy drivers during the pandemic should consider the role of national public procurement systems and deep trade agreements.

Ethan Ilzetzki, Benjamin Moll, 25 November 2020

On 5 November, the UK entered its second lockdown in an attempt to contain the spread of Covid-19. This column reports on the latest CfM survey, in which the majority of the panel of assessed that lockdowns have caused limited economic damage beyond what the pandemic itself would have caused unabated, and that the economic costs of the current lockdown are limited relative to the milder measures employed this summer. Nearly a fifth of the panel believes that the UK economy is in fact better off due to lockdowns, beyond the public health benefits of these measures. About a third of respondents believes that no trade-off exists between lives and livelihoods and that health and economic outcomes in fact go hand in hand, especially when better policies are taken into account, a third believes there is a small trade-off, and the remaining third that the trade-off is larger.

Miltos Makris, Flavio Toxvaerd, 24 November 2020

The prospect of an effective vaccine to Covid-19 in the near term makes it important to understand private and public incentives to suppress infection. This column examines how the prospect of a vaccine alters individuals’ incentives to self-protect between now and the arrival of the vaccine, and how a benevolent social planner would prefer individuals to self-protect. It finds that individuals tend to ramp up self-protection in anticipation of the vaccine, while the social planner manages the transition by introducing stricter suppression at early stages.

Claudia Hupkau, Barbara Petrongolo, 23 November 2020

The second lockdown in the UK is raising many questions about the impact on the economy and on society more broadly, including the implications for gender equality in the workplace and at home. This column uses household survey data to show that at the start of the pandemic in the UK, men were slightly more likely than women to be furloughed and to experience earnings losses, but by late summer the gender differential in furlough rates had reversed. Women also provided for a larger share of increased childcare needs on average, although in an important share of households, fathers became the primary childcare providers during the first lockdown. Sectors with a large share of female employment are now subjected to the second lockdown. These changes may have longer-term consequences on gender inequalities if they eventually reshape the reorganisation of work and family life.

Marina Conesa Martínez, Giulia Lotti, Andrew Powell, 20 November 2020

Global banks are highly connected, and banking systems are only as strong as the weakest links in the network. This column analyses cross-border syndicated lending to emerging and developing countries from 1993 to 2020 and finds evidence of both resilience and fragility in the global financial system. Contagion through co-lenders affected bank lending more strongly before and during the 2008-09 financial crisis but significantly less in a period after the crisis, consistent with the idea that the reduction in network density as a result of the crisis may have increased resilience to ‘normal shocks’. But Covid-19 is clearly no normal shock, and its impacts are likely spreading through the network, affecting the supply of loans to emerging economies.

Daniel Hamermesh, 19 November 2020

The Covid-19 pandemic has changed not only how people spend time, but with whom they spend it. Partnered people may be spending more time with a spouse or cohabitor while singles spend more time alone. This column investigates how these changes in time allocation might affect individual feelings of wellbeing. Time diaries from the US and the UK suggest that married couples compelled to spend more time together may experience increased happiness, while the crisis could take an emotional toll on unmarried individuals forced to spend more time alone.

Tomáš Konečný, Lukáš Pfeifer, 19 November 2020

The financial sector has an essential role to play in addressing the economic fallout from the Covid-19 pandemic. This column discusses the link between financial stability and restrictions on the mobility of capital along national borders of cross-border banking groups in the context of macroprudential capital buffers. It argues that apart from the direct absorption of systemic shocks, such macroprudential policies also enhance the performance of existing risk-sharing mechanisms, in particular in the case of synchronous shocks in the EU. The ESRB recommendation for restrictions of distributions during the pandemic contributes to the stabilising role of macroprudential capital buffers in the EU.

Olivier Darmouni, 17 November 2020

Conventional wisdom has it that banks play a special role in providing liquidity in bad times, while capital markets are used to fund investment in good times. Olivier Darmouni  tells Tim Phillips how, using micro-data on corporate balance sheets following the COVID-19 shock, he finds evidence that instead, the corporate bond market is central to firms' access to liquidity, crowding out bank loans even when the banking sector is healthy.  This liquidity-driven bond issuance questions the comparative advantage of banks in liquidity provision, and suggests that the V-shaped recovery of bond markets, propelled by the Federal Reserve, is unlikely to lead to a V-shaped recovery in real activity.
Read the underlying paper, Crowding Out Bank Loans: Liquidity Driven Bond Issuance by Olivier Darmouni and Kerry Y. Siani, which, which appeared in issue 51 of CEPR's Covid Economics series, here.

Simon Evenett, Johannes Fritz, 17 November 2020

The onset of the COVID-19 pandemic meant governments faced their second systemic economic crisis in under 15 years. This column introduces the latest Global Trade Alert report, which documents the extensive cross-border spillovers created by government policy intervention during the first ten months of the year, much of it in response to the pandemic. The evidence challenges five common claims made by officials during crises and questions the current approach to crisis management found in WTO accords.

Gordon Betcherman, Mauro Testaverde, 18 November 2020

The Covid-19 crisis has profoundly affected employment everywhere, but countries have adopted different strategies to try to mitigate the worst of the effects. This column compares the Greek experience to the rest of Europe, as well as to North America. The authors conclude that given the nature of the pandemic, models for managing labour market shocks will need to offer extended support where the shock persists or reoccurs. Crucially, successful policy approaches will need to be well suited for enabling job creation once conditions are in place for a restart.

Tim Willems, 17 November 2020

The COVID-induced surge in public debt has raised concerns about its sustainability, further increasing the need to improve the debt-restructuring process. This column proposes an auction-based strategy to restructure sovereign debt that tailors the shape of the restructured debt stock optimally to creditor preferences, subject to debt being sustainable post-restructuring. Any debt relief provided to the country gets optimally distributed over its creditors, thus minimising the pain inflicted upon them. A version of the winner’s curse can reduce the ‘holdout problem’ of creditors trying to free-ride on each other’s contributions towards debt relief. All this should smoothen the restructuring process and enable the debtor to mobilise greater creditor support (given the amount of relief provided). 

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