Are Temporary or Permanent Income Payments Better Placed to Boost Demand during Covid-19?

Prabhakar Rajiv ()
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Prabhakar Rajiv: Economics, The Open University, Milton Keynes, MK7 6AA, UK

Basic Income Studies, 2022, vol. 17, issue 1, 15-27

Abstract: Covid-19 has sparked calls for a universal basic income as a way of coping with a demand shock caused by the pandemic. Temporary income payments have been part of the emergency response to the pandemic. This paper questions the effectiveness of temporary payments as a way to raise demand. Some observers claim that vouchers are better targeted at sectors hit hard by Covid-19 as people may have a tendency to save than spend from temporary payments. There may be a stronger case for permanent rather than temporary payments if the aim is to boost demand in the economy.

Keywords: Covid-19; universal basic income; temporary income payments (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1515/bis-2020-0022

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