02393cas a2200325 a 4500 AALejournalIMF022172 230101c9999 xx r poo 0 0eng d 5.00 USD 9781616356309 1018-5941 BD-DhAAL BD-DhAAL Brzoza-Brzezina, Michal. Monetary Policy and COVID-19 / Michal Brzoza-Brzezina, Marcin Kolasa, Krzysztof Makarski. Washington, D.C. : International Monetary Fund, 2021. 1 online resource (42 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We study the macroeconomic effects of the COVID-19 epidemic in a quantitative dynamic general equilibrium setup with nominal rigidities. We evaluate various containment policies and show that they allow to dramatically reduce the welfare cost of the disease. Then we investigate the role that monetary policy, in its capacity to manage aggregate demand, should play during the epidemic. According to our results, treating the observed output contraction as a standard recession leads to overly expansionary policy. Finally, we check how central banks should resolve the trade-off between stabilizing the economy and containing the epidemic. If no administrative restrictions are in place, the second motive prevails and, despite the deep recession, optimal monetary policy is in fact contractionary. Conversely, if sufficient containment measures are introduced, central bank interventions should be expansionary and help stabilize economic activity. Mode of access: Internet General Aggregative Models imf Health imf Macroeconomic Policy and Macroeconomic Aspects of Public Finance imf Monetary Policy, Central Banking, and The Supply of Money imf National Government Expenditures and Related Policies imf Kolasa, Marcin. Makarski, Krzysztof. IMF Working Papers; Working Paper ; No. 2021/274 Full text available on IMF http://elibrary.imf.org/view/journals/001/2021/274/001.2021.issue-274-en.xml IMF e-Library