Economic Situation After Covid-19 €“ The Policy Trilemma

After almost five months of uncertainties, starting with the medical sectors, continuing with sports, tourism, aviation, conference, etc. we are still in the phase of asking how to deal with the Covid-19 pandemic and looking for answers. Each person is asking herself how to do and each government what policy to adopt. If the first observation to make about this pandemic is that it affects all the states of the planet, the second is that the responses provided by these states are extremely diverse, as are the results. The reason for this diversity lies in a triangle of impossibility. The expression, well known to economists, originally refers to the difficulty of managing a country that wishes to manage a fixed exchange rate, monetary autonomy, and free capital mobility at the same time. It looks like the world is today in the same complicate situation; therefore, we believe is adequate to think about the difficulty of public management of the pandemic as an impossible trinity. By the means of descriptive and comparative analysis, the paper reveals the similitudes between the macroeconomic model Mundell-Fleming and recovering options available for governments after a pandemic crisis.