Germany agrees to a 130 billion euro package to boost the economy affected by the coronavirus pandemic.
Germany will put 130 billion euros into an economic stimulus package to revive an economy that was severely affected by the coronavirus pandemic, Chancellor Angela Merkel said late Wednesday.
As part of the far-reaching measures, outlined in a 15-page document, the value-added tax is to be lowered temporarily, families are to receive 300 euros per child, and the state discount on the purchase of electric cars is to be doubled to 6,000 euros.
Craig Alexander, Chief Economist of Deloitte Canada, gives some thoughts on what the COVID 19 crisis could mean for productivity development.
One of my main concerns about economic recovery after the crisis is the potential slowdown (or total decline) in labor productivity. There is some evidence that workers are, on average, less productive when they work from a distance than when they are in the office. And since distance working is likely to remain a significant part of business life until a vaccine is fully implemented, overall productivity is likely to suffer.
This could be exacerbated by physical distance regulations in retail, finance, transportation and other service-producing sectors. The new restrictions are likely to increase costs and require investment in potentially unproductive capital (barriers, scanners, etc.) when maintaining an office, running a business or producing in a factory. In the absence of productivity gains, rising operating costs are expected to exert downward pressure on wages or upward pressure on prices, making a slow recovery scenario much more likely.