Volume 2, Number 1 (2021) Economics of Recovery from Covid-19

The global economy has been deeply injured by more than one year of lockdown and restrictions to conduct business. Economic activity will be required to adapt to new conditions, and economists struggle to forecast when we will return to pre-crisis output and productivity. Some sectors may be hit harder (brick and mortar retail, transportation, tourism, restaurants, public entertainment, amongst others) and will have to transform.

Governments, central banks, and international bodies have immediately responded with large, often open-ended plans to provide liquidity and subsidies. In the short term, debt relief and capital support can alleviate temporary shocks to companies’ balance sheets. However, protracting these programs without an unbiased cost-benefit analysis may start a subsidy war, perpetuate overcapacity in distressed sectors, and maintain a lifeline to malinvestment.

Universidad Francisco Marroquin and the Journal of New Finance have published this special issue to discuss how the economy and the financial markets can recover from this crisis.