Wednesday, July 8, 2020

"Trickle up"

Economic Recovery Proceeding But Virus Promises To Keep Growth Slow and Uneven, Tim Duy, 6 July 2020:
A wildcard in this whole situation is the expansiveness of the next fiscal support package. The generally positive data flow could lead to a less expensive fiscal package. Such an inclination would be a mistake. The expanded unemployment benefits in particular are providing critical support at the base of the economy and is almost certainly the reason retail sales and consumer confidence are holding up better than might be expected given the magnitude of the shock. It allows workers to cover their fixed costs, which includes paying the rent and mortgage. Think of it as “trickle up” policy.
As Tim Duy says, a less expensive, less expansive fiscal package "would be a mistake".

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