In the coming days we will ask Schar School experts to weigh in on the COVID-19 crisis as it pertains to their field of study.
Maurice Kugler is one of the world’s foremost experts on labor markets, productivity growth, global value chains, and international trade. Before joining the faculty at the Schar School of Policy and Government, Kugler taught at Stanford University and Harvard University. He has served as the Head of Research of the UN’s annual Human Development Report and as a Senior Economist at the World Bank.
What challenges will policymakers face due to COVID-19?
Kugler: The critical challenge for economic policy in the face of the coronavirus is that modern macroeconomic policy instruments, both monetary and fiscal, are most suited to dampen fluctuations originated by aggregate demand shocks, primarily affecting consumption. But COVID-19, in terms of its economic impact, started as an aggregate supply shock—impacting production costs—disrupting global value chains as Chinese exports dropped dramatically with ripple effects. Read more.