For anyone interested, here are my introductory remarks to the Epidemic Response Committee this morning.
From it, I’m going to extract just my final paragraph
Finally, in 2008/09 we threw a lot at the economy, responding to a recession that also wasn’t homegrown. The OCR was cut by 575 basis points and a lot of fiscal stimulus was in the works. But it still took until 2017 – ten years – for the unemployment rate to fall back even to 4.5 per cent. This is a much much bigger economic disruption. We must do what it takes to prevent any repetition, and all the scarring of individual lives that such persistent unemployment would entail. Doing so will have to involve both fiscal and monetary policy. But there isn’t limitless fiscal capacity, and at present monetary policy is largely spinning its wheels, doing little that makes much difference where it counts. That can’t be allowed to continue.
The wider forward-looking context is in the SSANSE Policy Brief “Rebuilding New Zealand’s Shattered Economy in a Post-Covid World” released last week.