By Vitor Gaspar and Gita Gopinath عربي, 中文, Español, 日本語, Português, Русский  The ongoing COVID-19 pandemic has already prompted an unprecedented fiscal policy response of close to $11 trillion worldwide. But with confirmed cases and fatalities still rising fast, policymakers will have to keep the public health response their No. 1 priority while retaining supportive and flexible fiscal policies and preparing for transformational economic change. Policymakers should tackle the rising poverty and inequality, as well as the structural weaknesses exposed by the crisis to better prepare for future shocks. In the face of a sharp decline in global output, a massive fiscal response has been necessary to increase health capacity, replace lost household income and prevent large-scale bankruptcies. But the policy response has also contributed to global public debt reaching its highest level in recorded history, at over 100 percent of global GDP, in excess of post-World War II peaks. According to the Fiscal Monitor database of country fiscal measures in response to the COVID-19 pandemic, covering a representative sample of over 50 countries, total global fiscal support so far has been split almost evenly between above-the-line – measures with a direct effect on revenue and expenditure such as deferral of taxes and cash transfers– and … Continue reading Fiscal Policies for a Transformed World