{
  "title": "Monetary Policy and COVID-19",
  "publication": "IMF Working Papers, November 12, 2021",
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  "summary": "We study the macroeconomic effects of the COVID-19 epidemic in a quantitative dynamic general equilibrium setup with nominal rigidities. We evaluate various containment policies and show that they allow to dramatically reduce the welfare cost of the disease.",
  "sections": [
    {
      "heading": "Study framework and objectives",
      "content": "- Quantitative dynamic general equilibrium setup with nominal rigidities.\n- Evaluate various containment policies and quantify welfare costs of the disease.\n- Investigate the role of monetary policy in managing aggregate demand during the epidemic.\n- Analyze central bank trade-offs between stabilizing the economy and containing the epidemic."
    },
    {
      "heading": "Main findings on containment policies",
      "content": "- Containment policies \"allow to dramatically reduce the welfare cost of the disease.\""
    },
    {
      "heading": "Main findings on monetary policy stance",
      "content": "- \"Treating the observed output contraction as a standard recession leads to overly expansionary policy.\"\n- When no administrative restrictions are in place, the motive to contain the epidemic prevails and \"despite the deep recession, optimal monetary policy is in fact contractionary.\"\n- Conversely, \"if sufficient containment measures are introduced, central bank interventions should be expansionary and help stabilize economic activity.\""
    },
    {
      "heading": "Policy implications and guidance",
      "content": "- Monetary policy should not mechanically treat epidemic-induced output contractions as standard recessions.\n- Optimal monetary policy depends on the presence and strength of containment measures:\n  - No administrative restrictions: prioritize containment, optimal monetary policy may be contractionary.\n  - Sufficient containment measures: central bank interventions should be expansionary to stabilize activity.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/11/12/monetary-policy-and-covid-19-506831"
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    "Authors: Michal Brzoza-Brzezina, Marcin Kolasa, Krzysztof Makarski",
    "Published: November 12, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781616356309.001",
    "Quantitative dynamic general equilibrium setup with nominal rigidities.",
    "Evaluate various containment policies and quantify welfare costs of the disease.",
    "Investigate the role of monetary policy in managing aggregate demand during the epidemic.",
    "Analyze central bank trade-offs between stabilizing the economy and containing the epidemic.",
    "Containment policies \"allow to dramatically reduce the welfare cost of the disease.\"",
    "\"Treating the observed output contraction as a standard recession leads to overly expansionary policy.\"",
    "When no administrative restrictions are in place, the motive to contain the epidemic prevails and \"despite the deep recession, optimal monetary policy is in fact contractionary.\"",
    "Conversely, \"if sufficient containment measures are introduced, central bank interventions should be expansionary and help stabilize economic activity.\"",
    "Monetary policy should not mechanically treat epidemic-induced output contractions as standard recessions.",
    "Optimal monetary policy depends on the presence and strength of containment measures:",
    "**Working Paper**"
  ],
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