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Working Paper
Responding to COVID-19: A Note
We consider several epidemiological simulations of the COVID-19 pandemic using the textbook SIR model and discuss the basic implications of these results for crafting an adequate response to the ensuing economic crisis. Our simulations are meant to be illustrative of the findings reported in the epidemiological literature using more sophisticated models (e.g., Ferguson et al. (2020)). The key observation we stress is that moderating the epidemiological response of social distancing according to the models may come at a steep price of extending the duration of the pandemic and hence the time ...
Discussion Paper
Why Cash Transfers Are Good Policy in the COVID-19 Pandemic
The COVID-19 pandemic has had an exceptionally large and negative impact on economic activity around the world. We show that cash transfers can be a useful policy tool during a pandemic. Cash transfers mitigate consumption inequality induced by the pandemic and provide incentives to individuals who are most negatively affected by lockdown policies to adhere to them.
Discussion Paper
The Federal Reserve's Liquidity Backstops to the Municipal Bond Market during the COVID-19 Pandemic
The COVID-19 pandemic has caused tremendous hardship all over the world. In response, the Federal Reserve has moved quickly and aggressively to support the economy in the United States. In this article, we present some initial evidence for the effectiveness of some of the facilities in calming the municipal bond market, particularly the short-term variable-rate demand obligation (VRDO) market. We discuss the important role of liquidity backstops in mitigating runs and stabilizing financial markets in general based on insights from our study on the runs on VRDO and auction-rate securities ...