As the new coronavirus continues to spread rapidly outside China, medical professionals and policymakers around the world are fighting to contain the outbreak. But what role can or should governments play in this situation — or, for that matter, when natural disasters strike?
The Chinese authorities already have loosened monetary policy in response to the outbreak, an understandable move in view of the virus’s serious effect on key economic sectors, notably manufacturing and transport. But monetary measures are a roundabout way of coping with real disruptions such as epidemics or natural calamities. Fiscal policies, on the other hand, are more likely to have a direct impact on economic challenges.