As the latest OECD simulations rightly point out, the area where there is really room for maneuvering is that of fiscal policies and structural reforms. According to the international organization, in the short term and under a scenario of coordination in the G-20, the aforementioned measures could add up to nearly 0.5 percentage points of GDP in the first year with respect to the central scenario, as opposed to nearly 0.15 percentage points of monetary policy.
central banks and coronavirus
Ranko Berich (Monex Europe) | Jay Powell and the Fed have taken the warning financial markets have given about coronavirus over the past weeks to heart and brought out the big guns with a 50bp intra-meeting rate cut. This is a tool that has not been used since 2008, and comes after a serious worsening in the global macroeconomic outlook due to the Covid-19 outbreak shattering previous optimistic assumptions that it would be mostly contained within Q1.