The United States’ economic policy response to COVID-19 may not have been perfect, but Chicago Booth’s Chad Syverson says a number of key policy institutions have taken important steps toward mitigating the damage. The Fed, Congress, and regulators willing to at least temporarily relax certain rules have all helped—but more will be needed.
What have policy makers done well so far? The Fed, actually, has been excellent. They've basically decided that liquidity is not going to be a problem in any market that they have any reach into, and have done a lot of things, a lot of new and creative things, to try to keep those problems from cropping up.
I think Congress, by passing the relief bill, did a good thing. It's going to get money into consumers' hands. It's going to get money into some businesses' hands, hopefully keep them from having to lay off a lot of workers and shut down and miss payments. There seem to be some administrative issues coming up that might slow down the rate at which the money gets out there, which is disappointing. And hopefully those will be fixed.
The bill itself is good, but I think more is going to be needed.
On the regulatory level, after some initial slow responses, I think people have realized that some regulatory issues are more of a hindrance in this situation than a help. Things like letting doctors graduate early to get more medical staff available, letting them practice across state lines, approval of certain medical devices and tests more quickly than there would be otherwise.
So those sorts of things are good. Some of them might actually be good to make permanent. We'll see if that happens. But at least in the meantime, it's good that they're not posing a problem.