Expert Pitch
University of Notre Dame

Notre Dame expert says “stimulus” package is economically appropriate, urges caution

25-Mar-2020 2:15 PM EDT, by University of Notre Dame

The White House and Senate March 25 reached a historic $2 trillion legislative package to counteract the negative shock from the coronavirus to the U.S. economy.

Congress should be applauded for putting together such an unprecedentedly massive package so quickly, according to Jeffrey Bergstrand, professor of finance at the University of Notre Dame’s Mendoza College of Business.

Bergstrand, a former Federal Reserve economist, said the size of the package is economically appropriate, however, he urged caution on several fronts.

“First, this program is only insurance against the viable possibility of a depression,” Bergstrand said. “At this time, $500 billion in cash payments to households, $350 billion in loans to small businesses, $100 billion to hospitals, $500 billion in support for large corporations in selected industries and an increase in unemployment benefits provides liquidity to households and businesses just to stay open. This will simply postpone closure of businesses and personal bankruptcies.

“It should not be viewed as a stimulus program, as it is not likely to push the economy back to its fourth quarter 2019 GDP level. The economy is certain to recede in the first, second and third quarters of 2020,” he added.

Economists have suggested this is a temporary negative shock to the economy, implying falling economic activity for the second and perhaps third quarters of 2020, but then economic activity will resume. However, Bergstrand is wary of claims of a temporary recession. At the time, the economic shock suffered globally during the Great Recession of 2008-2009 was also initially viewed as temporary, he said.

“As we know from history, the Federal Reserve and the U.S. Treasury acted in concert to provide liquidity – at that time, also, an unprecedented timely increase – which stabilized both the banking system and the economy,” said Bergstrand. “However, it is important to recall that the economy operated below full employment for eight more years, from 2009 to 2017.”

“U.S. economic activity is not immune to the rest of the world,” he said. “U.S. exports account for approximately 12 percent of demand for U.S. GDP. As during the Great Recession, the eurozone is fiscally constrained without the economic framework for the type of massive fiscal spending and government deficits that the U.S. government can allow. It is unlikely that they will respond as quickly or as magnanimously as the United States’ federal government, hurting the U.S. recovery. Also, we have yet to see with any confidence the economic impact on Southern Hemisphere economies in Latin America and Africa.”

While the $2 trillion legislative package will provide liquidity to maintain solvency of households and businesses over the next two quarters, Bergstrand cautions only proper health guidelines from government will allay a major component of the decline in economic activity before some current state lock-downs.

“Even before present lock-downs,” he explained, “aggregate demand in consumer and investment spending had fallen by households and firms due to uncertainty about individuals’ health. The lack of a majority of U.S. states imposing shelter-in-place and the recent prospect of less federal government support for shelter-in-place will cause uncertainty to rise again, stifling a possible recovery and potentially prolonging the recession – and deepening it.”




Filters close

Showing results

110 of 2526
Released: 10-Jul-2020 12:35 PM EDT
Our itch to share helps spread COVID-19 misinformation
Massachusetts Institute of Technology (MIT)

To stay current about the Covid-19 pandemic, people need to process health information when they read the news. Inevitably, that means people will be exposed to health misinformation, too, in the form of false content, often found online, about the illness.

Newswise: Pandemic Inspires Framework for Enhanced Care in Nursing Homes
Released: 10-Jul-2020 12:25 PM EDT
Pandemic Inspires Framework for Enhanced Care in Nursing Homes
University of Pennsylvania School of Nursing

As of May 2020, nursing home residents account for a staggering one-third of the more than 80,000 deaths due to COVID-19 in the U.S. This pandemic has resulted in unprecedented threats—like reduced access to resources needed to contain and eliminate the spread of the virus—to achieving and sustaining care quality even in the best nursing homes. Active engagement of nursing home leaders in developing solutions responsive to the unprecedented threats to quality standards of care delivery is required.

Newswise: General Electric Healthcare Chooses UH to Clinically 
Evaluate First-of-its-kind Imaging System
Released: 10-Jul-2020 12:15 PM EDT
General Electric Healthcare Chooses UH to Clinically Evaluate First-of-its-kind Imaging System
University Hospitals Cleveland Medical Center

University Hospitals Cleveland Medical Center physicians completed evaluation for the GE Healthcare Critical Care Suite, and the technology is now in daily clinical practice – flagging between seven to 15 collapsed lungs per day within the hospital. No one on the team could have predicted the onset of the COVID-19 pandemic, but this technology and future research with GEHC may enhance the capability to improve care for COVID-19 patients in the ICU. Critical Care Suite is now assisting in COVID and non-COVID patient care as the AMX 240 travels to intensive care units within the hospital.

Released: 10-Jul-2020 11:50 AM EDT
COVID-19 Can Be Transmitted in the Womb, Reports Pediatric Infectious Disease Journal
Wolters Kluwer Health: Lippincott Williams and Wilkins

A baby girl in Texas – born prematurely to a mother with COVID-19 – is the strongest evidence to date that intrauterine (in the womb) transmission of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) can occur, reports The Pediatric Infectious Disease Journal, the official journal of The European Society for Paediatric Infectious Diseases. The journal is published in the Lippincott portfolio by Wolters Kluwer.

Released: 10-Jul-2020 9:45 AM EDT
How COVID-19 Shifted Inpatient Imaging Utilization
Harvey L. Neiman Health Policy Institute

As medical resources shifted away from elective and non-urgent procedures toward emergent and critical care of COVID-19 patients, departments were forced to reconfigure their personnel and resources. In particular, many Radiology practices rescheduled non-urgent and routine imaging according to recommendations from the American College of Radiology (ACR). This new Harvey L. Neiman Health Policy Institute study, published online in the Journal of American College of Radiology (JACR), evaluates the change in the inpatient imaging volumes and composition mix during the COVID-19 pandemic within a large healthcare system.

access_time Embargo lifts in 2 days
Embargo will expire: 12-Jul-2020 7:00 PM EDT Released to reporters: 10-Jul-2020 9:00 AM EDT

A reporter's PressPass is required to access this story until the embargo expires on 12-Jul-2020 7:00 PM EDT The Newswise PressPass gives verified journalists access to embargoed stories. Please log in to complete a presspass application. If you have not yet registered, please Register. When you fill out the registration form, please identify yourself as a reporter in order to advance to the presspass application form.

Released: 10-Jul-2020 9:00 AM EDT
Team is first in Texas to investigate convalescent plasma for prevention of COVID-19 onset and progression
University of Texas Health Science Center at Houston

A research team is the first in Texas to investigate whether plasma from COVID-19 survivors can be used in outpatient settings to prevent the onset and progression of the virus in two new clinical trials at UTHealth.

Newswise: Commentary in Pediatrics: Children Don’t Transmit Covid-19, Schools Should Reopen in Fall
7-Jul-2020 3:00 PM EDT
Commentary in Pediatrics: Children Don’t Transmit Covid-19, Schools Should Reopen in Fall
University of Vermont

Based on one new and three recent studies, the authors of this commentary in Pediatrics conclude that children rarely transmit Covid-19, either among themselves or to adults. The authors recommend that schools reopen in the fall, since staying home can adversely affects children's development.


Showing results

110 of 2526

close
1.9531