On Thursday crashed the exchanges more. In Switzerland, the leading Index SMI lost 9,64 per cent, the DAX in Germany, even more than 12 percent. One reason for this is the decision of U.S. President Donald Trump, not Europeans any more to enter the United States is. The procedure in Trumps, however, had to break the stock markets in the United States. The S&P 500 as the main Index lost after the start of trading more than 8 percent. Anywhere the concern in the wide, whether the policy is able to cope with the economic consequences of the crisis.
In ordinary times, the monetary policy of the Central banks is to combat the crisis by lowering interest rates at best. However, interest rates are already everywhere, extremely low to negative. And Central banks can align in a crisis like now little. This has already been shown, as the youngest, except were able to calm down planned interest rate cuts of 0.5 percent by the American and the British Central Bank, the markets barely.
Now, the production breaks even, because precursors may be missing or increase the price.
Now, the “fiscal should take on policy”, the General requirement. This is what is meant in ordinary times, that the States increase spending in order to ensure demand – for example, with investment in the infrastructure. However, this would currently achieved, even if the countries are not indebted, as for many matches.
Because the spread of the Virus threatens the economy, not only because of a failure of demand. Now, the production breaks even, because precursors are missing or raise, Employees to stay at home or arrangements make it impossible for the ordinary operation. Some obvious examples are the tourism, the airline industry or the organisers of events are.
Meaningless money – and fiscal policy, but by no means. But its purpose is now different than usual. As the Swiss Economist Beatrice Weder Di Mauro in a comprehensive paper for the Euro-zone holds, it is now all about the spread of the Virus to reside and to prevent long-term damage to the economy. Such long-term damage is caused, for example, if a solid company due to the virus crisis in Geldnöte and therefore, in bankruptcy advised.
now, Because rapid action is crucial, should also be rules to limit deficits exposed.
The task of fiscal policy is therefore now, for example, in ensuring sufficient resources for the health system. Companies that fall because of the crisis in payment difficulties directly with government funds. A possibility for Delays in maturing are payments, such as taxes or additional charges.
grants for short-time work is a different measure to Bridge short-term payment difficulties. Other proposals go up to direct payments to citizens and companies. Such an approach has already been chosen Hong Kong, it is discussed already for other countries. Now, because rapid action is crucial, to be exposed to, therefore, rules to limit deficits in the Eurozone.
The function of monetary policy should be to prevent liquidity shortages in the capital markets, and to ensure that the supply of credit can be maintained especially small and medium-sized enterprises by the banks. For this, banks should get the money cheaply and simply from the Central Bank. To the Emergency, the Central banks should also provide the States the money they need to cope with their task.
Created: 12.03.2020, at 22:19
