COVID-19 and the ECB: A Macroeconomic Critique

In the 21st century the world has witnessed five pandemics, including H1N1 in 2009, Severe Acute Respiratory Syndrome (SARS) in 2002, and most recently COVID-19. Evidence suggests that the likelihood of pandemics will only continue to increase due to globalization, urbanization, changes in land use, and greater exploitation of the natural environment. These events have fueled discussions around the nature and extent of the accompanying economic contagion and what policy mechanisms are available to mitigate the fallout. Included in this debate is whether central banks, such as the European Central Bank (ECB), should seek to stabilize the economic effects of a pandemic, like COVID-19. Employing detailed macroeconomic analysis, this article endeavors to answer this crucial question.