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The risks of exiting too early the policy responses to the COVID-19 recession

Author

Listed:
  • Nuno Cassola

    (CefES; CEMAPRE, University of Lisbon, Portugal)

  • Paul De Grauwe

    (EI, London School of Economics and Political Science, UK)

  • Claudio Morana

    (University of Milano-Bicocca, Italy; CefES; Rimini Centre for Economic Analysis; CeRP; Center for European Studies, Harvard University, USA)

  • Patrizio Tirelli

    (Department of Economics and Management, University of Pavia, Italy; Griffith University, Australia; CefES; Rimini Centre for Economic Analysis)

Abstract

This policy brief warns about the risks of discontinuing the policy responses to the COVID-19 crisis by pursuing exit strategies too early and/or too sharply. It outlines a comprehensive strategy for limiting such risks globally and offers an in-depth discussion of the European situation. Due to fiscal rules written in a pre- COVID-19 era and excessive emphasis on controlling public debt ratios, the Euro Area could be left with long-lasting scars, so its situation requires special treatment. Therefore, we articulate some policy proposals designed to preserve and strengthen the recovery in the EMU.

Suggested Citation

  • Nuno Cassola & Paul De Grauwe & Claudio Morana & Patrizio Tirelli, 2021. "The risks of exiting too early the policy responses to the COVID-19 recession," Working Paper series 21-22, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:21-22
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    References listed on IDEAS

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    Cited by:

    1. Fernandes, Mário Correia & Dutra, Tiago Mota & Dias, José Carlos & Teixeira, João C.A., 2023. "Modelling output gaps in the Euro Area with structural breaks: The COVID-19 recession," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1046-1058.

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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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