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COVID-Economics Links (April 28)

Blogs, Opinions and Academic papers

The Deadly Urgency of Now - Gordon Brown (PS)
The COVID-19 Balancing Act
Michael J Boskin
COVID-19 Economic Downturn: What do cyclical norms suggest? - Stephen G Cecchetti and Kermit L. Schoenholtz
Covid Economics: Vetted and Real-Time Papers (Issue 10)- CEPR
Scaling up the COVID-19 crisis response now will avoid higher costs later - Ceyla Pazarbasioglu and Ayhan Kose (World Bank)
The Evolving Impacts of COVID-19 on Small Businesses Since the CARES Act
John Eric Humphries, Christopher Neilson and Gabriel Ulyssea (SSRN)
How South Korea Stopped COVID-19 Early - Myoung-Hee Kim
How the Tension Between Big Business and Antitrust Will Reshape Post-Covid America - Matt Stoller (ProMarket)
Where should the marginal dollar go in U.S. fiscal policy - David Berger and Kyle Herkenhoff (Equitable Growth)
Europe must act now to prepare the aftermath of the pandemic crisis - Laurence Boone, Álvaro Santos Pereira (VoxEU)
Exploiting a coronavirus weak-spot for an exit strategy - Uri Alon, Eran Yashiv (VoxEU)
Beating the coronavirus: Ensuring a socially equitable response - Louise Cord (World Bank)

News

The world has more to fear from deflation than hyperinflation - FT
Federal Reserve expands emergency coronavirus aid program to more cities and counties - Washington Post
Oil Prices Drop to Lowest Level Since 1986 - WSJ
Junk Bonds Bounce Back, Raising Hopes—and Concerns - WSJ
Over 30m workers in Europe turn to state for wage support - FT
Inflation figures are about to get fuzzier - FT

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COVID-Economics Links (April 26)

Health versus wealth: On the distributional effects of controlling a pandemic  - Jonathan Heathcote, Andrew Glover, Dirk Krueger, Víctor Ríos-Rull (VoxEU) The deflation threat from the virus will be long lasting - Gavyn Davies (FT) CBO’s Current Projections of GDP, Unemployment and Federal Deficit  - Congressional Budget Office Coronavirus Projected to Trigger Worst Economic Downturn Since 1940s - WSJ Cash in the time of corona  - Andreas Joseph, Christiane Kneer, Neeltje van Horen, Jumana Saleheen (VoxEU) Reweaving the social fabric after the crisis - Andrew Haldane (FT) German shops reopen but celebrations in Berlin muted - FT.com We need a better head start for the next pandemic  - Mehdi Shiva (VoxEU) Forecasting recoveries is difficult: Evidence from past recessions  - Zidong An, Prakash Loungani (VoxEU) Will central banks serve up fresh stimulus? - FT.com

Where did the saving glut go?

I have written before about the investment dearth that took place in advanced economies at the same time that we witnessed a global saving glut as illustrated in the chart below. In particular, the 2002-2007 expansion saw lower investment rates than any of the previous two expansions. If one thinks about a simple demand/supply framework using the saving (supply) and investment (demand) curves, this means that the investment curve for these countries must have shifted inwards at the same time that world interest rates were coming down. But what about emerging markets? Emerging markets' investment did not fall during the last 10 years, to the contrary it accelerated very fast after 2000. This is more what one would expect as a reaction to the global saving glut. The additional saving must be going somewhere (saving must equal investment in the world). As interest rates are coming down, emerging markets engage in more investment (whether this is simply a move along a downward-sloppin...