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SHORT-TIME WORK AND RELATED MEASURES TO MITIGATE
THE CONSEQUENCES OF A (PARTIAL) ECONOMIC SHUTDOWN IDEA 2020
 While some revenue/income is likely permanently lost (many beers at pubs will not be caught up with), in other cases there is just a temporal shift (demand for many permanent goods is likely to “catch up”, though subject to worse economic conditions). The former is likely optimally addressed by transfers, the latter may only require easier access to credit
 Benefits to both firms and workers may also partly replace salary that would otherwise still be paid
 Substituting salaries can also choke creative adjustment mechanisms (delivering food, theaters and clubs that offer live streams, online lectures and other work from home, ...) as well as private means of surviving the crisis (savings, donations, private credit, ...).
 Neither low-cost, reversible adjustments (e.g. Uber drivers delivering food) nor adjustments to long-run changes (reductions in tourism and manufacturing seem likely) should be disincentivized
In economic terms, these are problems of moral hazard and crowd-out.
Bottom line
Economic policy and welfare/stimulus policy in particular is known to be prone to wasteful spending. When large interventions are necessary, there is little time to design them well, and low government capacity to monitor their implementation is available, these policy costs can easily become large. The key to minimizing them is to make programs incentive compatible (i.e. to reduce program take-up as an alternative to engaging in some productive activity) and self-targeting (i.e. to make people/companies self-select into whether and which programs they should apply to).
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