By Rogoff, Kenneth,

Journal of Economic Perspectives Vol. 36, No. 4 (Fall 2022): pp. 147-166.

Date published: Fall 2022

During the COVID-19 pandemic, governments of middle-income emerging market economies faced the same challenges as those of high-income advanced economies: surging health costs, the need to protect populations through lockdowns, and a collapse in global demand. Both sets of countries engaged in many of the same direct and indirect stimulus policies, including cash transfers to individuals, loan guarantees to firms, rent moratoria, and regulatory forbearance for the banking sector. Most central banks in emerging markets cut interest rates, albeit not to zero, and some even engaged in significant quantitative easing.