The stay-at-home-social-distancing coronavirus policies are being supported by financial packages of billions or trillions of dollars.
And also by active monetary policies taken by the central banks: the injection of money in the economy through loans at zero interest rates (or even negative interest rates) or quantitative easing policies: the purchasing of bonds and other debt instruments.
These packages and measures are merely palliative. They are mostly intended to avoid chaos. They are designed to minimize the negative economic effects, by helping the companies and the people affected, but they will not revive the national or global economic engines.
The only policies that could bring the economy back to normality would be the lift of the stay-at-home measures taken to fight the virus – something that raises obvious ethical and economic concerns.
A premature lifting can create hundreds of thousands if not millions of deaths, and raises the risk of economic backfiring.
Pushing to loosen the present coronavirus policies can cause a surge in infections and deaths from the virus, with damaging economic consequences – especially considering that collective psychology, perceptions and ideas are also critical in economic dynamics.
On the other hand, it’s rather consensual that the present economic situation can’t be delayed by many months. It would be ruinous.
Listen to what Gov. Andrew M. Cuomo of New York said in a news conference: “Should young people go back to work sooner? Can we test for those who had the virus, resolved, and are now immune and can they start to go back to work?”.
That’s rather unavoidable: if the coronavirus pandemic persists beyond 2-3 months – and it certainly will, even if in mitigated and seasonal waves – governments will need to embrace other type of measures. Not just monetary policies and relief economic packages.
The question is: which measures?
And more than that: can such measures, taken by single countries bring back normalcy?
It’s doubtful. Our economies are too interconnected, as the coronavirus itself is showing to us.
Besides, we should not forget that there are key economic sectors like entertainment and restaurants, hotels and travel, that will not come back to normality without solving the pandemic issue.