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SHORT-TIME WORK AND RELATED MEASURES TO MITIGATE
THE CONSEQUENCES OF A (PARTIAL) ECONOMIC SHUTDOWN IDEA 2020
the government has reasonably certain foresight. Other than that, the lack of knowledge of which changes are long-run suggests dynamic and flexible policies that allow individuals and companies to slowly adjust to changes in their expectations of what will be long-run. Overall, these costs point toward refraining from suspending the economy as much as possible, but to allow for responses to changes that are likely long-run.
C. Costs of Implementing Emergency Measures
Causes and Examples
It is obviously preferable to minimize wasteful spending, since costs can quickly become enormous. Consider the simple example of the cost of sending a fixed subsidy to all 11 million residents of the Czech Republic compared to only sending money to those in need. Programs need to be targeted well at those in need (which includes reducing “exploitation”) and avoid incentivizing wasteful or harmful adjustments in order to receive help (e.g. quitting jobs that one could return to later for the purpose of receiving benefits). In the specific situation of a lockdown, it may be possible to clearly identify some groups that very likely need support (e.g. the elderly, hotels, restaurants) and some adjustments that make the design of welfare programs difficult are simply not possible (e.g. rents do not adjust in the very short run). Yet apart from some specific cases, the well-known problem that we do not have enough information to target programs or assess the sensibility of individual choices looms even larger in the current situation. In such situations, it is desirable to make programs self-targeting in two ways: It should only be attractive for the needy to receive support, so that the proportion of needy individuals among applicants is high (allowing for cheap or no means-tests or even universal access) and receiving (or applying for) the program should not require wasteful adjustments or rule out productive adjustments.
Both the efficient implementation of government support programs and their externalities are thoroughly studied in the economic literature. However, what we know is often case- specific and better discussed in the context of the specific policies below. Several issues are likely to play an important role in this specific situation:
 Some individuals and companies can sufficiently smooth their income/revenue, so “blanket policies” would likely support many non-needy cases
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