Wednesday, April 8, 2020
COVID-19 economic impact in developing countries.
The policy response to the pandemic in many developed countries has been twofold, locking down the whole population and announcing stimulus packages to minimise bankruptcies and protect jobs. Yet a combination of factors makes this policy approach unsustainable. Many of these countries have much larger informal sectors, where compliance will be lower, and more difficult to enforce, and stimulus measures will be costlier. Moreover, many of them face foreign exchange and fiscal constraints, making it more difficult to expand monetary and fiscal policies.