Abstract

ABSTRACT:

We develop a pair of models that speak to the goals and design of the sort of business lending and corporate bond purchase programs that have been introduced by governments in response to the ongoing COVID-19 pandemic. An overarching theme is that, in contrast to the classic lender-of-last-resort thinking that underpinned much of the response to the 2007–2009 global financial crisis, an effective policy response to the pandemic will require the government to accept the prospect of significant losses on credit extended to private sector firms.

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Additional Information

ISSN
1533-4465
Print ISSN
0007-2303
Pages
pp. 3-60
Launched on MUSE
2021-10-12
Open Access
No
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