Pandemics, Payments and Fiscal Policy: Lessons from Four Years after the Outbreak of Covid-19
BIG-DATA-BASED ECONOMIC INSIGHTS
Key Messages
- Existing and well-functioning e-commerce markets and electronic payment systems improve pandemic performance by providing an effective layer of protection against contagious diseases
- Covid-19 caused a major reallocation shock to consumer spending
- Revolving credit is an effective though underutilized instrument for consumption smoothing during times of economic slack
- Generous fiscal support incentivized social distancing stronger and longer and had heterogeneous effects across the wealth distribution
Abstract
The outbreak of an unprecedented global health crisis about four years ago put the very foundations of our communities, economies and politics to the test. Policymakers had to learn and react fast to limit human and economic costs at the same time. This article highlights the importance of existing markets, technological features such as payments systems and economic decisions at the transactional level in combating the spread of a contagious disease while stabilizing aggregate economic activity.
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Citation
Gerome Wolf: “Pandemics, Payments and Fiscal Policy: Lessons from Four Years after the Outbreak of Covid-19,” EconPol Forum 25 (2), CESifo, Munich, 2024.