Shaping the macro-economy in response to COVID-19: A responsible economic stimulus, a stable financial sector and a revival in exports. Methodology Paper

Jodie Keane, Max Mendez-Parra, Phyllis Papadavid, Laetitia Pettinotti, Sherillyn Raga and Dirk Willem te Velde, February 2021

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Ensuring a healthy macro-economy is crucial for a high-quality recovery from Covid-19. Engineering appropriate stimulus packages, keeping a stable financial sector and reviving high value-added exports are core tasks of governments across the world as they also try to recover from the economic effects of the pandemic in 2020–2023. Unfortunately, the context in low-income settings looks more depressed because of lack of finance and more vulnerable economies.

Informing policy options for a better macro-economy in lower-income settings is a core task of an International Development Research Centre (IDRC)-funded project undertaken by the Overseas Development Institute (ODI) and five other think-tanks. This paper presents a methodology and a range of methods to provide quality research and analysis that can underpin such policy advice. The project aims to inform policy-makers in Bangladesh, Sri Lanka, Kenya, Peru and Tanzania on appropriate policies to address the Covid-19 recession and recovery over 2021–2023, with a focus on the interface between macroeconomic policies and economic, social (especially gender) and environmental outcomes.

Photo: Central Bank of Kenya. World Bank. Licence: (CC BY-NC-ND 2.0)