Coronanomics (7) - Global Policy Responses Against the Negative Impact of COVID-19

Saturday, June 13, 2020 / 06:25 AM / by Proshare Content/ Header Image Credit:  EcoGraphics

Global Policy Responses

Various central banks have come up with different monetary policy measures on their economy against the negative impact of the coronavirus. The US Federal Reserve, Bank of England, Peoples Bank of China, Reserve Bank of Australia all cut their interest rate to boost liquidity in their respective economies.

While the European Central Bank decided to use other monetary tools such as the purchase of public and private securities to help mitigate the impact of the coronavirus outbreak. The Bank of Japan also plans to stabilize markets and offer sufficient liquidity via market operations and asset purchases (see Table 10).

Table 10: Global Central Bank's Anti-Recession Policies

Global Governments Fiscal Policy Anti-Recession Policies

The limitations of monetary policy may necessitate the intervention of the government through fiscal policy measures. Several continental governments have come up with a variety of fiscal policies to stimulate their economies amidst the COVID-19 pandemic.

The American government proposed tax deferrals and cash payments to citizens to ensure a speedy revival of economic growth in the year as it fought to soften the negative impact of the virus on supply chains and production outputs.

While the Japanese government, on the other hand, proposed an emergency economic package worth over $270bn to offset the adverse economic effect of a fall in domestic demand and supply chain hiccups (see Illustration 5).

Illustration 5: Global Governments Fiscal Policy Anti-Recession Policies

Illustration 6: Fiscal Responses from Major Global Financial Institutions

Related Reports (PDF)

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2.     Executive Summary PDF - Proshare, June 06, 2020

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