Coronavirus: You know war means this – Rabobank

The world has declared war on COVID-19: this has major implications for markets, according to analysts at Rabobank.

Key quotes

“In short, we aren’t fighting the war the right way – and that will mean a far higher fiscal cost to us all.”

“War efforts are usually centred on maximizing output; but this time one of the key attacks against the virus is to do nothing.”

“If we emerge from this crisis and immediately try to go back to austerity and tight monetary policy then we not only risk repeating the errors of the postglobal financial crisis era; rather, we risk repeating the errors of the post-World War 1 era.”

“Yet if we emerge from this and maintain extraordinary fiscal-monetary policy then we enter an entirely new economic landscape: money is no longer a constraint.”