The cost of the COVID-19 crisis: Lockdowns, macroeconomic expectations, and consumer spending
Business cycles are rarely a matter of life or death in advanced economies, but the COVID-19 crisis is forcing policymakers into painful trade-offs between saving lives and saving the economy. This column uses several waves of a customised survey to study the economic costs of US lockdowns in terms of spending, labour market outcomes, and macroeconomic expectations. It finds overall spending drops of more than 30%, unemployment expectations climbing more than 10%, inflation expectations falling, uncertainty rising, and plans to purchase large durables plummeting.
Baldwin and Weder di Mauro (2020) provide an excellent overview of the recent policyRead More »