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The Morning After

Policy interventions will have to be intelligent: Striving to create deep, but temporary, safety nets during COVID-19 without generating imbalances and distortions thereafter

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illustration: Ajaya Mohanty

Sajjid Chinoy
Two things are becoming clearer with every passing day. First, only aggressive containment measures have a chance of flattening the COVID-19 outbreak curve. To be incentive-compatible, however, lockdowns need to be accompanied by commensurate income support — especially in emerging markets with incomplete and leaky safety nets — for populations to comply with lockdowns. Second, the global economic crater from this “sudden stop” of activity will be much higher than imagined. The global economy is on track to contracting (at an annualised rate) by almost 15 per cent and 7 per cent in the first two quarters of 2020, respectively.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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First Published: Mar 30 2020 | 12:20 AM IST

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