Covid-19 Talk: 'The Coronavirus Stimulus Package: How large is the transfer multiplier?' by Christian Bayer - 23/07/2020
Lecture on 23/07/2020, Thursday 18:00 CET (Paris-Berlin-Rome) - 5:00 p.m. GMT (London)
Title: The Coronavirus Stimulus Package: How large is the transfer multiplier?
Speaker: Christian Bayer
Abstract: In response to the COVID-19 pandemic, large parts of the economy have been locked down and, as a result, households' income risk has risen sharply. At the same time, policy makers have put forward the largest stimulus package in history. In the U.S., it amounts to $2 trillion, a quarter of which is earmarked for transfer payments to households. To the extent that such transfers are conditional on recipients being unemployed, they mitigate income risk and the adverse impact of the lockdown ex ante. Unconditional transfers, in contrast, stabilize income ex post. We simulate the eﬀects of a lockdown in a medium-scale HANK model and quantify the impact of transfers. For the short run, we ﬁnd large diﬀerences in the transfer multiplier: it is 0.25 for unconditional transfers and 1.5 for conditional transfers. Overall, we ﬁnd that the transfers reduce the output loss due to the pandemic by up to 5 percentage points.
The COVID-19 Epidemiological Modelling Project presents a series of talks on the pandemic. Previous talks can be viewed again on YouTube:
This channel is also used for live streaming of the talks, for participants who do not like to take part in the discussion. For participants who like to take part in the discussion this Thursday, use the Zoom URL
Meeting-ID: 843 1697 2876
Overview of all talks can be found at the Mathematical Modelling web pages.