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Economic policies in a pandemic

Author

Listed:
  • Kireyev, A.

    (International Monetary Fund, Washington, USA)

  • Ferrer, J.

    (International Monetary Fund, Washington, USA)

Abstract

What economic policy space does a country have to respond to a crisis provoked by the Covid-19 pandemic? To assess this space, the article calculates the nominal policy space index as a sum of each country's fiscal space, monetary space, and reserve space. This nominal policy space is then adjusted for institutional features of individual countries to derive the effective policy space index. By way of illustration, the article applies the index to the Covid-19 crisis. It finds that at least 95 countries (about 11 percent of global GDP and 23 percent of population) have no or very limited policy space and may require emergency assistance.

Suggested Citation

  • Kireyev, A. & Ferrer, J., 2021. "Economic policies in a pandemic," Journal of the New Economic Association, New Economic Association, vol. 49(1), pages 185-192.
    • Handle: RePEc:nea:journl:y:2021:i:49:p:185-192
    DOI: 10.31737/2221-2264-2021-49-1-8
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    References listed on IDEAS

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    1. Alexander E. Kentikelenis & Thomas H. Stubbs & Lawrence P. King, 2016. "IMF conditionality and development policy space, 1985–2014," Review of International Political Economy, Taylor & Francis Journals, vol. 23(4), pages 543-582, July.
    2. Christina D. Romer & David H. Romer, 2018. "Phillips Lecture – Why Some Times Are Different: Macroeconomic Policy and the Aftermath of Financial Crises," Economica, London School of Economics and Political Science, vol. 85(337), pages 1-40, January.
    3. Ashvin Ahuja & Kevin Wiseman & Murtaza H Syed, 2017. "Assessing Country Risk; Selected Approaches," IMF Technical Notes and Manuals 17/08, International Monetary Fund.
    4. Mr. Ashvin Ahuja & Kevin Wiseman & Mr. Murtaza H Syed, 2017. "Assessing Country Risk: Selected Approaches," IMF Technical Notes and Manuals 2017/008, International Monetary Fund.
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    Cited by:

    1. Beata Bieszk-Stolorz & Iwona Markowicz, 2021. "Decline in Share Prices of Energy and Fuel Companies on the Warsaw Stock Exchange as a Reaction to the COVID-19 Pandemic," Energies, MDPI, vol. 14(17), pages 1-17, August.
    2. Andrea Renda, 2021. "The EU Industrial Strategy: Towards a Post-Growth Agenda?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 56(3), pages 133-138, May.

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    More about this item

    Keywords

    policy space; fiscal space; debt sustainability; foreign reserves; public debt; market access;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F01 - International Economics - - General - - - Global Outlook
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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