Corona Public finances Simulations Deficit Debt

The economic shock caused by the CORONA-crisis is unseen and dramatic. In this article we do not try to predict macro-economic consequences. We translate given macro-economic, and inherently extremely uncertain, macro-economic predictions, into its impact on public finance figures. This shows that the transitory nature of the shock, however big, has fundamentally different consequences than long term structural changes in revenues and expenditures. As long as the underlying structural factors remain unchanged, the sustainability of public finances is not fundamentally affected by this huge negative, but temporary, shock.



André Decoster

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