COVID-19

Abstract

AbstractThe fiscal response to COVID-19 was striking for not just its scale but also its speed. Six months into the pandemic, G20 governments had committed $15 trillion in fiscal support. Central banks again played a crucial part by backstopping the market in public debt. The crisis also challenged long-held German debt aversion and upended the impasse over debt mutualization in Europe. More uncertain was the prognosis for developing nations, some of which came out of the crisis with unsustainable debt burdens. Although questions were understandably raised about how economies emerging from the pandemic would deal with elevated debt burdens, COVID-19 once more highlighted the role of debt in enabling governments to meet existential crises.