WHEN THE CONTAGION EFFECT WENT LIVE: THE FIRST RESPONSES TO THE COVID-19 PANDEMIC

The CoViD-19 pandemic has changed world history and sparked a huge debate among social scientists. In this work, we concentrate on the initial (two months of) institutional responses to the pandemic in the advanced economies, by analyzing the discussions in the press and in the scientific literature. These first analyses of the pandemic represent the “instinctive” and “automatic” responses of the economic profession, on one side, and policymakers on the other, to the emergency, which allows for an interesting overview of the progression of events. We will deal with the international and domestic measures aimed at countervailing the collapse of income and production, the new role of governments and central banks in the economy, and how the adopted anti-shock measures have already forced some countries to shift their institutional economic policy framework. This is especially relevant for the European Union, since the Stability and Growth Pact can be seen as one of the first ‘victims’ of the virus, as well as possibly its financial system, which has also succumbed to a contagion effect. Finally, we will discuss if and how economic theory will be able to come forth with new ideas and provide novel and viable solutions.