The macroeconomic effects of covid-19: the imperative need for a Keynesian solution

Les effets macroéconomiques de la covid-19: l’impératif d’une solution keynésienne

Mikael Randrup Byrialsen, Finn Olesen and Mogens Ove Madsen

Revue de la Régulation - Capitalisme, institutions, pouvoirs, 2021, vol. 29

Abstract: A very severe recession has hit the global economy in the wake of covid-19. The exact magnitude of this shock is uncertain, but many believe that the setback in GDP will be on a scale similar to, if not worse than, the first years of the Great Recession. As such, there is an imperative need for policy actions of a Keynesian nature, as have already been implemented in many countries. Given the atypical circumstances of the crisis, a new type of supply-side-oriented Post-Keynesian policy should be followed. The purpose of this policy should be to support the firms, in order to prevent them from destroying their production capacity and to move forward with the ecological transition. This paper uses the case of Denmark to present a demand-driven Post-Keynesian stock-flow consistant (SFC) model with labour market restrictions based. It highlights some aspects of the negative economic impact of covid-19 on the Danish economy and of the policies adopted by the Danish Parliament.

Keywords: covid-19; global recession; SFC modelling; fiscal policy; covid-19; récession mondiale; modélisation SFC; politique budgétaire; covid-19; recesión global; el modelo EFC y las políticas fiscales (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:rvr:journl:2021:18405

DOI: 10.4000/regulation.18405

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