Co-ordinated macroeconomic policy remains the most effective response to the pandemic economic shock

The spread of Covid-19 has shaken people's lives around the world in an unprecedented way, adversely affecting their health, well-being, ability to work, and linked to this, their income. In response, Governments and central banks have put in place wide-ranging policies to protect people and businesses from the economic shock caused by the pandemic. They have been quick to don an 'economic life support machine', introducing a mix of innovative fiscal measures, unconventional monetary policy and financial 'stress' policies. Despite such active policy, the path to economic recovery remains uncertain in the absence of a vaccine or relevant medicinal therapeutics. What is clear is that policymakers are becoming central actors, walking a delicate tightrope between healthcare concerns and the future of our economies. As we debate how economic policy should navigate through future turbulent seas, this blog makes a simulated case for macroeconomic policy coordination.