A Policy Framework for Mitigating the Impact of the COVID-19 Crisis
COVID-19 is a seismic shock the likes of which have not been seen in living memory. What makes it different? For one, it is a rolling combination of a global health pandemic and an economic crisis that is unfolding at an unprecedented pace. The imp...
| Main Authors: | , , , |
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| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/930461589921117100/A-Policy-Framework-for-Mitigating-the-Impact-of-the-COVID-19-Crisis http://hdl.handle.net/10986/33776 |
| Summary: | COVID-19 is a seismic shock the likes of
which have not been seen in living memory. What makes it
different? For one, it is a rolling combination of a global
health pandemic and an economic crisis that is unfolding at
an unprecedented pace. The impact is already devastating at
both the human and economic levels, in mutually reinforcing
ways. Second, the crisis has turned truly global in record
time, to an extent that the 2008 global financial crisis
(GFC) became only after half a year or later. The epicenter
of the health crisis has shifted from China to Europe and
now to the US. But the health and economic consequences are
affecting every part of the inhabited world, with rising
ferocity. Third, this is both a demand- and supply-side
economic shock. The world has seen severe demand shocks (the
Great Depression and the GFC) and severe supply shocks (the
two World Wars, the Oil Crisis of the 1970s), but rarely the
two at same time. The damage from the current crisis in
Europe and Central Asia (ECA) and elsewhere is deep and
multifaceted, wherein the adverse outcomes can be put in
three main categories: human suffering, economic recession,
and financial and corporate sector distress. The COVID-19, a
major health crisis, has also quickly turned into an
economic crisis, and threatens to become a serious financial
crisis, with each acting in mutually reinforcing ways. The
immediate policy response must focus on containing the virus
outbreak and managing it in its three dimensions (health,
economic, and financial and corporate). |
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