Can Central Bank Mitigate the Effects of the COVID-19 Pandemic on the Macroeconomy?

The COVID-19 pandemic has resulted in over 1.4 million confirmed cases and over 83,000 deaths globally. It has also sparked fears of an impending economic crisis and recession. Social distancing, self-isolation and travel restrictions forced a decrease in the workforce across all economic sectors and caused many jobs to be lost. Schools have closed down, and the need of commodities and manufactured products has decreased. In contrast, the need for medical supplies has significantly increased. The food sector has also seen a great demand due to panic-buying and stockpiling of food products. In response to this global outbreak, we summarise the socio-economic effects of COVID-19 on individual aspects of the world economy.

Summary The severe acute respiratory syndrome (SARS) outbreak in 2003 resulted in more than 8000 cases and 800 deaths. SARS was eventually contained by means of syndromic surveillance, prompt isolation of patients, strict enforcement of quarantine of all contacts, and in some areas top-down enforcement of community quarantine. By interrupting all human-to-human transmission, SARS was effectively eradicated. By contrast, by Feb 28, 2020, within a matter of 2 months since the beginning of the outbreak of coronavirus disease 2019 (COVID-19), more than 82 000 confirmed cases of COVID-19 have been reported with more than 2800 deaths. Although there are striking similarities between SARS and COVID-19, the differences in the virus characteristics will ultimately determine whether the same measures for SARS will also be successful for COVID-19. COVID-19 differs from SARS in terms of infectious period, transmissibility, clinical severity, and extent of community spread. Even if traditional public health measures are not able to fully contain the outbreak of COVID-19, they will still be effective in reducing peak incidence and global deaths. Exportations to other countries need not result in rapid large-scale outbreaks, if countries have the political will to rapidly implement countermeasures.