Sunday, 15.03.2020 – A Long Term Econ Perspective On Covid-19

Link of the day: A take on the economics of the virus )

An interesting thought about the long term economic effects of the coronavirus is this: Much of the damage that could be done depends on intertemporal effects and whether companies are able to move cashflows through time. Imagine a small restaurant that is profitable, but loses customers in the short term due to the virus. Whether that restaurant will exist in two years time crucially depends on when the owner has to pay his taxes, whether he will be able to reduce hours and whether he will be able to borrow money to pay for bills that are due now, even though profits will only come back again later in the future. The twitter thread takes a very condensed econ perspective on the virus and proposes a couple of measures that seem quite sensible to me.

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