Governments are rolling out some heavy monetary and fiscal weaponry to fight the coronavirus – The National

Governments are rolling out some heavy monetary and fiscal weaponry to fight the coronavirus – The National

Governments are rolling out some heavy monetary and fiscal weaponry to fight the coronavirus. Monetary and fiscal stimulus measures launched by central banks and governments equate to about 10-15 per cent of GDP. Central banks and governments worldwide have launched an unprecedented monetary and fiscal front to combat the economic damage wrought by the coronavirus pandemic.. The exact degree of damage is inestimable and requires even greater measures to head off dangerous self-fulfilling prophecies due to panicky behaviour by individuals and investors.. The reaction so far from central banks has been exemplary and more than appropriate.. In contrast to the global financial crisis of 2008, central banks' liquidity injections - while necessary, even in unlimited amounts - will not be enough to resolve the economic damage.. This time, monetary policy is serving only to maintain market liquidity and payments, and to support banks.. Other governments are enacting similar rescue plans, often amounting to 10 per cent or more of their GDP.. Helicopter money is created by the central bank and is either distributed directly to individuals or indirectly by financing public spending through the purchase of government bonds.. In contrast to QE, helicopter money would not be withdrawn from circulation,