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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:

SARA Systems Streaming

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.

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Tuesday, 29 November 2022