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Economists usually worry about bailing out private firms and increasing national debt. But right now, we should be doing both

In a Covid-19-induced crisis the usual rules do not apply

By Jonathan Portes  

HM Treasury. Photo: Kirsty O'Connor/PA Archive/PA Images

As so often in economics, it’s about supply and demand; and remembering that both matter. The first and most obvious impact of the pandemic will be on supply. The most important input to any economy is labour; and both covid-19, and more significantly the measures taken to contain it, will reduce labour supply. If people are sick, if they’re self-isolating because they think they might be sick, or if they’re looking after vulnerable relatives or children who can’t go to school,…

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