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Covid-19 and Economic Analysis: a Review of the Debate

This newsletter aims at providing an overview of relevant, covid-19 related economic issues as discussed in the current literature. It therefore draws as much on traditional working papers as on (respected) online publications, blogs, etc. This issue mostly focuses on research linking the evolution of the pandemic to macroeconomic outcomes, largely resorting to the intuitions provided by a very new set of quantitative micro-founded models, studying the joint dynamics of health-related and economic variables (so-called SIR macro model). We aim at highlighting the mechanisms leading to ā€œVā€ of ā€œUā€ like type of virus-induced recessions, vs those implying more persistent output losses (Section 2). Within this class of models, it is also possible to frame crucial normative issues, with a view to understand what polices best address the vital trade-off between protecting health and preserving the economy (Section 3). Finally, attention is devoted to works studying the role of macroeconomic policies and of the financial sector in contrasting the crisis (Section 4).