The COVID-19 pandemic created an economic crisis of unprecedented scale and speed. Unlike the sluggish response to the 2008 financial crisis, policymakers implemented bold fiscal and monetary measures that produced remarkable results—the fastest labor market recovery in U.S. history, and historic employment levels previously considered impossible. By analyzing this exceptional period, we've developed frameworks for maintaining economic stability and employment during future crises.
Pandemic Response
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12 Posts
Contrary to the expectations of Fed officials, labor force participation growth has been strong over the last six months. In this piece, I use Current Population Survey microdata, correct for measurement issues, and show that an increase in labor force entry played a significant role in this recent…
Given Mnuchin’s stated intent to act in violation of the CARES Act, Chair Powell should reconsider his decision to transfer the funds back to Treasury, or at least clarify that they are for the sole purpose of being returned to the Exchange Stabilization Fund.
Sep 18, 2020
By Skanda Amarnath, Alex Williams, and Arnab Datta Executive Summary This piece provides an overview of how the Federal Reserve (“Fed”) decided to require all emergency lending authorized under Section 13(3) of the Federal Reserve Act be conducted at a “penalty rate,” as well as its policy ramifications. In
By Skanda Amarnath Executive Summary The pricing of the Municipal Liquidity Facility (MLF) makes it virtually irrelevant for most municipal debt issuers because current market prices are well above those that the Federal Reserve (Fed) is offering. The success or failure of the MLF should be judged not solely by
The federal government should provide support to state governments during economic downturns in the form of block stabilization grants that serve to replace lost tax revenue.
Between mid-February and mid-March, the number of Americans unemployed grew by 1.4 million. But the rise in Americans reporting any type of labor market disruption — absence, wanting more hours, or not having a job at all — was almost four times that number: 5.6 million.
The coronavirus shock will lead to a dramatic spike in the unemployment rate. But even this surge could understate the true labor market damage from the virus.
