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Mitigating COVID-19 Effects with Conventional Monetary Policy

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Abstract

The Federal Reserve slashed the federal funds rate in response to the effects of the COVID-19 pandemic. The full impact of the pandemic on the economy is still uncertain and depends on many factors. Analysis suggests that allowing the federal funds rate to fall fast will help the economy cope with the aftermath of COVID-19. In particular, the limited policy space due to the effective lower bound of the federal funds rate before the pandemic reinforces rather than offsets the need for a rapid funds rate decline.

Suggested Citation

  • Vasco Curdia, 2020. "Mitigating COVID-19 Effects with Conventional Monetary Policy," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2020(09), pages 1-05, April.
    • Handle: RePEc:fip:fedfel:87776
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    Cited by:

    1. Nguyen Ngoc Thach, 2023. "Applying Monte Carlo Simulations to a Small Data Analysis of a Case of Economic Growth in COVID-19 Times," SAGE Open, , vol. 13(2), pages 21582440231, June.
    2. Hakan Yilmazkuday, 2020. "Unequal unemployment effects of COVID-19 and monetary policy across U.S. States," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 4(S3), pages 45-53, December.
    3. Hakan Yilmazkuday, 2021. "Welfare costs of COVID‐19: Evidence from US counties," Journal of Regional Science, Wiley Blackwell, vol. 61(4), pages 826-848, September.
    4. Costa Junior, Celso J. & Garcia-Cintado, Alejandro C. & Junior, Karlo Marques, 2021. "Macroeconomic policies and the pandemic-driven recession," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 438-465.
    5. Celso José Costa Jr & Alejandro Garcia-Cintado & Karlo Marques, 2020. "Conventional macroeconomic policies and the pandemic-driven recession," Working Papers 20.03, Universidad Pablo de Olavide, Department of Economics.

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