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The emerging economic themes of the COVID-19 pandemic

The COVID-19 pandemic has created both a medical crisis and an economic crisis. As others have noted, it presents challenges just as big as those in the Spanish Flu Pandemic and the Great Depression—all at once.

The tasks currently facing policy-makers are extraordinary. The ideas, arguments, and proposals in a new special issue of OxREP are intended to support them in that urgent work. Though many of these articles were written as the virus first began to spread, they remain as timely and important as they were on original completion. We have learned a lot in the short time since the pandemic began—but it is extraordinary how little we still know.

In reviewing the research, three broad themes emerge. The first is that the pandemic requires entirely new types of intervention. Many of the contributions in this issue explore them: what they are, how they might be improved, and possible alternatives to those currently in place. Some are designed to respond to the medical emergency: to control the spread of the virus in an efficient and workable way. Others are to tackle the economic emergency: to support workers and businesses, to deal with the inequalities in impact, to maintain financial stability, among much else.

The second broad theme is that the challenges we face are global. An infectious disease like COVID-19 spills across borders and cannot be handled by any country acting alone. It has spread to low- and middle- income countries, many of which have less developed institutions of government and public administration, with implications for responding effectively. It has had significant impacts on the volume of international trade and stirred up pre-existing protectionist pressures. And it has made very clear the urgent need for effective international co-ordination to contain the medical and economic emergencies—but, as the current response to the pandemic has shown, such cooperation is very hard to achieve in practice.

The third and final theme is that, while the challenges are immense, there are important opportunities in how we choose to respond. To some, for instance, the COVID-19 pandemic has exposed a failed system of corporate governance: there is now a chance to reform business and finance. To others, it has exposed the extent to which economies around the world rely on low-wage workforce: this ought now to have wider implications for pay and immigration policy in the future. As we engage in extraordinary levels of fiscal expenditure, there is a chance to focus on policies that will not only support economic recovery but also help to mitigate climate change. And in reforming our international institutions to support greater co-operation, there is a chance to prepare not only for the next infectious disease, but for the many other global problems that will we face in the twenty-first century.

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