Alexander Hodbod, Cars Hommes, Stefanie J. Huber, Isabelle Salle, 21 December 2020

The profound and protracted experience of the COVID-19 crisis may fundamentally change consumer preferences. This column reveals how a representative consumer survey in five EU countries indicates that many consumers do not miss certain goods and services they have cut down on since the COVID-19 outbreak. It concludes that fiscal policy must recognise that some firms will become obsolete in the altered post-COVID-19 environment. To achieve a swift recovery, these obsolete firms must be allowed to fail fast so that resources can be reallocated to more efficient uses. 

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