The Minneapolis Federal Reserve claimed on a report that the economic restrictions associated with the coronavirus outbreak could be twice as though as it should be.
“The shutdown in place is around twice as extensive as it should be,” explained the report.
The inform suggests that a middle ground solution may be an optimal alternative to the current situation, which tends to favor the elderly and harming younger individuals that may prefer looser rules.
"Older individuals have the most to gain from slowing virus diffusion. Young workers in sectors that are shuttered have the most to lose," explained the researchers.
The researchers claimed that April's total shutdown is too extensive, but that a partial shutdown should remain in place at least until July. Besides this, they concluded that the welfare gains and losses from economic mitigation are unevenly distributed across different segments of American society.
"Our baseline calibration suggests that the shutdown in place on April 12 was too extensive, but that a utilitarian planner would keep a partial shutdown in place through July," concluded the report.
By 10:40 GMT the US dollar went down by 0.20 percent against the Japanese Yen, hitting the 107.40 level. On the other hand, it gained 0.28 percent against the Swiss Franc, at 0.9704 while it advanced 0.60 percent against the Canadian Dollar, at 1.4230.
RBA: Economy Will Contract 10 Percent on the First Semester
The Reserve Bank of Australia expects the economy to contract by 10 percent in the first half of 2020, according to the Westpac Institutional Bank.
“The economy will contract by around 10% in the first half of 2020 with most of the contraction centred around the June quarter. Westpac forecast contraction of -0.7% in the March quarter followed by -8.5% in the June quarter,” stated the Westpac Institutional Bank, “The Governor forecast that the Australian economy would contract by 6% in 2020 compared to our forecast of minus 5% . We forecast a growth “bounce back” of around 5% in the second half of 2020, centred mainly on the December quarter,” they added.
The RBA also expects a 6-7% rebound on 2021, and an unemployment level beyond 6 percent for the next couple of years.
'We agree but expect that if the RBA achieves it’s 6-7% growth forecast in 2021 then unemployment is likely to fall somewhat below 6%," explained the Westpac Institutional Bank.
By 10:58 GMT the Australian Dollar went down by 0.75 percent against the US dollar, falling to the 0.6288 level. Conversely, it went down by 0.96 percent against the Japanese Yen, falling to the 67.52 level.