The COVID-19 crisis has had large impacts on local economies and government budgets. Balanced budget requirements, not mis-management, have generated a fiscal crisis and forced state and local governments to reduce service provision precisely when it is in greatest demand.

COVID-19 and the Black Lives Matter movement have focused attention on disparities in economic opportunity between Black and white America. This has added urgency to efforts to bolster Black students' access to higher education. It's a pivotal moment for UNCF, founded at the end of WWII as the United Negro College Fund. The organization supports historically Black colleges and universities (HBCUs). President and CEO, Dr. Michael Lomax, discusses the role of HBCUs in fostering economic opportunity and civic engagement and how changes in philanthropic activity and public policy can make a difference.

Business leaders know they should “never let a good crisis go to waste,” but very few of them actually live this maxim. In a study of companies’ performance during and after the past several recessions, one of us found that 17% didn’t survive (because they filed for bankruptcy, were acquired, or went private), and of those that did, the vast majority — 80% — were still struggling three years later to match their pre-recession growth. Only 9% of surviving companies “roared out of the recession,” posting results that exceeded both their peers and their pre-recession performance. 

State and local governments that rely heavily on sales tax revenue face an increasing financial burden absent federal aid, says Daniel Green.

A firm’s stock price volatility during times of uncertainty can significantly reduce workers’ consumption and savings decisions. This paper sheds light on the economic effects of uncertainty, and in particular, how firms provide insurance to their workers during periods of turmoil.

In the wake of COVID-19, firms announced both employee furloughs and (typically small) CEO wage cuts. This research shows that firms’ treatment of employees matters far more to consumers than executive pay cuts.

Women scientists and those with young children are paying a steep career price in the pandemic, according to new research by Karim Lakhani, Kyle Myers, and colleagues.

A friend asked me recently if we would ever “get back to normal.” It’s a question we’re all asking ourselves. Suddenly things we once took completely for granted — having dinner in a busy restaurant, being able to give a friend a hug — seem like distant luxuries.

Developing countries have fewer fiscal tools and policy options to combat COVID-19 damage to their economies, according to research by Alberto Cavallo and colleagues.

Pulitzer Prize-winning journalists Sheryl WuDunn (HBS ‘86) and Nicholas Kristof are widely recognized for their coverage of international humanitarian crises. In their recent book, Tightrope: Americans Reaching for Hope, they turn their attention to the struggles of the US working class. Regular encounters with the devastation wracking blue-collar families in Kristof’s hometown of Yamhill, Ore., prompted the couple to examine the effects (and causes) of joblessness, homelessness, substance abuse, incarceration, and chronic ill-health. WuDunn discusses the hard-to-break intergenerational cycles of poverty and despair, the impact of COVID-19, and some glimmers of hope.

Latin America needs to implement an effective policy response on the public health front and on income transfers. This will require a massive provision of liquidity. The COVID-19 pandemic will require, on average, the equivalent to 10% of the region's GDP, including spending measures such as income transfers, credit provision, government guarantees, and tax reductions.

Findings from a nationwide survey underscore the importance of demand projections and interdependencies among businesses for owners’ reopening decisions. Businesses expect the demand for their services will be greatly depressed for many months to come.

Instead of the "watchful waiting" approach taken by US bank regulators to the pandemic crisis, they should use their prudential authorities to encourage banks to increase their equity capital. This is effectively a way of buying low-cost insurance against adverse scenarios that have become more likely.

During a market collapse, investors will pay up for companies considered resilient in their response, according to George Serafeim.

Examining the impact that changes in expenditure patterns are having on the measurement of consumer price indices (CPI) inflation in 17 countries, this study finds that the cost of living for the average consumer is higher than estimated by the official CPI. This implies that real consumption is falling more quickly over time.

COVID-19 has enhanced already existing fissures undermining some societies’ commitments to globalization. Governments and firms need to act decisively to make the models of capitalism in the United States and Europe more friendly to small- and medium-sized firms, more equal in opportunity, and more meritocratic.

Phone or flour? People with lower incomes are judged more harshly for what they choose to buy, say Serena F. Hagerty and Kate Barasz.

Investors look for evidence during a market crisis that a company is resilient. This study includes findings that challenge the notion that companies need to adopt practices that hurt their employees because investors want them to do so.

Beyond its human toll, COVID-19 has wrought upon us a daunting economic toll. In a matter of just two weeks in mid-March 2020, entire industries and sectors were brought to an abrupt halt. To survive a crisis like this, a business must be both efficient and resilient. Prudent accounting — the common-sense accounting concept that there should be a higher threshold to recognizing anticipated gains relative to recognizing anticipated losses — had for generations helped businesses balance these two pulls.

This paper explains the seemingly conflicting narratives from the stock and labor market about the underlying state of the economy. We show that day-to-day changes in the predictions of standard models of infectious disease forecast changes in aggregate stock returns in pandemics.

The recent “Open Letter to Business Leaders,” written by three Harvard Business School students and cosigned by 1200+ MBAs and counting, appears to ask the impossible of the Fortune 500 CEOs to whom it is addressed. “Put your employees first now,” it urges. “Retain them, re-deploy them if needed, and most importantly, pay them.”

Emerging economies are characterized by an extremely high prevalence of informality, small-firm employment and jobs not fit for working from home. These features factor into how the COVID-19 crisis has affected the economy. The authors develop a framework that, based on accounting identities and actual data, quantifies potential job and income losses during the crisis and recovery for economies with different economic organization structures. Their analysis incorporates differential exposure of jobs across categories of firm-size and formality status, as well as sectors and occupations.

Will COVID-19 derail ongoing efforts to provide skills training and meaningful career opportunities for the low-income workers who are bearing the brunt of the crisis? Brookings’ Marcela Escobari explains the realities of low-wage employment and what businesses and local leaders can do to foster economic development that creates the steppingstone jobs that lead to better jobs.

The Harvard Business School COVID-19 Global Policy Tracker monitors new developments and changes in government policies throughout this crisis to analyze trends and correlations in countries' responses and economic impact.

An expected explosion in bankruptcy proceedings over the coming months could overwhelm the courts, says Stuart Gilson.

The pandemic has radically altered the economic landscape and vastly complicated the VC market. Money is in short supply and start-ups need to run leaner. Consolidation looms. DFJ Growth partner, Barry Schuler, discusses risk mitigation, mentoring entrepreneurs through the crisis, and taking the long view.

In this final episode of the season, Youngme Moon, Felix Oberholzer-Gee, and Mihir Desai discuss the stories they’ll be watching this summer, including how businesses will re-open. They also offer an extended set of recommendations for watching, reading, and other projects during the summer months.

Return guest, Harvard Business School senior fellow Karen Mills, is uniquely qualified to assert that the COVID-19 pandemic poses a greater threat to US small businesses than the Great Recession of 2008-2009.

Experts from Harvard Business School's Social Enterprise Initiative offer advice to nonprofits struggling to survive the coronavirus pandemic.

More than 33 million Americans have filed for initial unemployment over just seven weeks and millions more are expected to file in the coming months. The abrupt loss of earnings has stretched many people’s finances to breaking point, forcing many into overdrafts, which can trigger significant additional charges. In response, some banks have voluntarily suspended overdraft charges and, in a few states, notably New York, governors have issued directives instructing banks to waive overdraft fees and lenders to show forbearance on missed mortgage payments.

Youngme Moon, Felix Oberholzer-Gee, and Mihir Desai debate what they’ve learned from first quarter earnings reports from Apple, Facebook, and others. They also discuss warning signs for Uber and Lyft, and share their thoughts about the recession.

American retailers have yet to pass along higher prices caused by Chinese tariffs, but shrinking product demand caused by the coronavirus could change that, warns Alberto Cavallo.

In the first months of 2020, a pandemic overwhelmed the world. COVID-19, commonly known as the coronavirus, spread from China and created a severe public health emergency across countries. Prior to the coronavirus outbreak, the global GDP growth rate for 2020 was expected to be close to 2.3%. As of April 2020, multilateral organizations estimated that GDP would contract by 3% - way worse than the 0.1% contraction of 2009, and the deepest dive since the Great Depression. What policy options existed to mitigate the financial and economic distress of containment, and what factors did different countries weigh in deciding which paths to choose? Was there a terrible choice - either damage livelihoods through extended lockdowns, or sacrifice thousands or even millions of lives to the virus - or were policies reinforcing?

Professor Robin Greenwood and former Harvard president, Lawrence H. Summers, discuss the impacts of COVID-19 and what lies ahead for the US and global economy.

The onset of the COVID-19 pandemic has sparked a vivid debate on policies aiming to restrict mobility, the role of heterogeneity for their effectiveness, and the potential economic cost. As such, economies considering exit strategies from lockdowns seek to implement them in a way that does not endanger a robust recovery from the public health crisis. As the shape of the recovery is uncertain, a guiding principle for an optimal policy is to consider how the risk of disease has affected agents' behavior, which may not be uniform and could vary widely across regions and individuals.

Professor Dani Rodrik and Professor Debora Spar discuss the impacts of the COVID-19 pandemic on the Global Economy and Globalization, as a whole.

In the fourth session of the series, Professors Carmen Reinhart and Laura Alfaro discuss the impacts COVID-19 has on the local and global economy, comparing it's immediate effects to the Great Depression.

Youngme, Felix and Mihir discuss how various companies, industries, and consumers are showing their true colors during the COVID-19 crisis.

Following the 2008 financial crisis, France offered a business loan program that helped firms, employees, and even the government, says Boris Vallee. As the US Congress prepares to replenish its Paycheck Protection Program for small businesses, questions still linger: Do guaranteed loans for small businesses work in the long term? Who wins? Employees? Businesses? Taxpayers?

Youngme Moon, Felix Oberholzer-Gee, and Mihir Desai debate Apple and Google’s COVID-19 contact tracing plan. They also discuss the Federal Reserve, which has taken a series of unprecedented actions to prop up the economy.

What are the financial implications of rising seas and extreme weather? Asset managers and risk experts gathered at Harvard Business School to discuss how they’re evaluating climate risk in their portfolios.

Harvard economist Edward Glaeser is an expert on how cities function as economic engines and centers of innovation. He notes that the advantages of density in spurring creativity and productivity are mirrored by the vulnerability it creates to threats like disease. Cities and their most vulnerable residents have borne the brunt of pandemics since antiquity. As COVID-19 tests the resources and resilience of urban centers and confronts leaders with difficult choices, Glaeser explains the policy options for protecting people and stabilizing the economy.

Canadian entrepreneur Irfhan Rawji has insight into the pandemic’s influence on a wide range of sectors, from US companies working with global tech specialists, to startups in a variety of markets, the organic food business, and healthcare. He shares his observations on the coronavirus’ impact on the nature of work; how it is shaking up the VC world; increasing demand for organic and locally produced food; and testing the Canadian and US healthcare systems.

BGIE professors will discuss some of the macroeconomic policies announced around the world to tackle the economic crisis resulting from the pandemic, including simple frameworks to understand the main objectives of these policies, real-time data and statistics, and the challenges and risks associated with monetary and fiscal announcement in both developed and developing countries.

Over the decade since the end of the Global Financial Crisis, a low interest rate environment has attracted both borrowers and investors to aggressively participate in buoyant leveraged credit markets. This resulted in these markets reaching an unprecedented level of size and risk that had largely avoided disruption for many years. COVID-19 and the associated global response has delivered a severe economic shock, which is novel in its nature including the depth, breadth, and speed of its impact. Its collision with a highly leveraged corporate sector has created unique financial problems that remain largely unaddressed by the current proposals for federal assistance.

This analysis highlights that some banks profit from customers most in need: the banks who usually earn a significant fraction of total revenue from overdraft and NSF fees are also the banks that service lower income, hourly workers. These banks should be providing the most flexibility to their customers during this crisis, to help protect the most financially vulnerable people in our society at this time.

Youngme Moon, Felix Oberholzer-Gee, and Mihir Desai debate how the world will be changed by coronavirus. Their predictions for the “new normal” span healthcare, education, the sharing economy, working from home, and more.

Finance professors and panelists discuss government interventions to stabilize markets and how equity and fixed income markets are reacting to the pandemic, highlighting real-time data that are key indicators of market sentiment and functioning.

The pandemic has not only disrupted lives and businesses the world over, it has illuminated underlying fragilities in global value chains (GVC), which are divided among multiple firms and geographies.  In a new paper, Laura Alfaro and Ester Faia explore the unraveling of GVCs and related disruptions to money flows caused by the coronavirus. Their paper is titled Pandemics Fragilities: The Double-Coincidence of a Halt in Hyper-specialized GVC and the Big-Dollar-Hunger (pdf).

Kristen Senz discusses the results of a recent small-business owners survey with HBS professors.  The survey of small-business owners shows that lack of liquidity and skepticism of government programs are compounding COVID crisis recovery efforts.  Zoe B. Cullen, Michael Luca, and Christopher T. Stanton worked with Harvard University economics professor Ed Glaeser, Alex Bartik of the University of Illinois, and Marianne Bertrand at the University of Chicago’s Booth School of Business, to craft the survey and analyze responses.

The COVID-19 pandemic has thrown more people out of work than at any time since the Great Depression, and did so with unprecedented speed. In this debut episode of the Managing the Future of Work podcast’s COVID-19 Dispatches, economist and New York Times columnist Justin Wolfers discusses alternatives to the official unemployment figures; best and worst case scenarios; economic insecurity; and the need for federal aid to state and local governments.

Many American businesses will struggle to survive the current lockdown and the slow recovery that will inevitably follow. What, if anything, must be done in order to have the supply side of the American economy snap back to normal operations when the time comes?

The coronavirus pandemic has left the corporate sector scrambling for cash. So far, a relatively robust financial system has been able to provide short-term funding, primarily through the revolving lines of bank credit available to most firms.

The authors argue that a one-time government program, which we call Business Continuity Insurance (BCI), should be included in the U.S. government’s response to the COVID-19 pandemic and the resulting sudden economic stop. The goal of this program is to prevent the sudden stop from triggering an unprecedented wave of non-financial business bankruptcies, which would greatly amplify the economic contraction and inhibit economic recovery once the health emergency passes. Put simply, the goal is to enable businesses to keep their lights on during the health emergency so they can rapidly reopen afterwards. This new BCI program, in combination with other programs, maximizes the chance of a rapid economic recovery and minimizes the chance of a deep, prolonged recession.

We show that unanticipated changes in predicted infections during the SARS and COVID-19 pandemics forecast aggregate equity market returns. We model cumulative infections as either exponential or logistic, and re-estimate the parameters of these models each day of the outbreak using information reported up to that day. For each trading day t we compute the change in predicted infections using day t − 1 versus day t − 2 information. Regression results imply that a doubling of such predictions is associated with a 4 to 11 percent decline in aggregate market value. This result implies a decline in returns’ volatility as the trajectory of the pandemic becomes clearer.

Felix Oberholzer-Gee and Mihir Desai discuss how and why countries have differed in their responses to COVID-19, with a particular emphasis on their public health and economic responses. They also debate whether or not the recent U.S. stimulus package, including the bailouts, is designed appropriately.

In this episode, Youngme Moon, Felix Oberholzer-Gee, and Mihir Desai discuss the housing crisis and what the coronavirus pandemic means for renters, in particular.

In this bonus episode of the After Hours podcast, Youngme Moon, Mihir Desai, and Felix Oberholzer-Gee discuss the latest coronavirus news, debate whether the airlines deserve a bailout, and share some of their personal reflections on the crisis.

As Americans begin to practice social distancing in response to the coronavirus pandemic — staying home, teleworking in some cases — small businesses are already starting to feel the pinch.  Karen Mills is interviewed and asked to provide insight into what small businesses are facing during the coronavirus pandemic.

The risk of pandemics or natural disasters made clear the cascading damages of an un-diversified global value chain (trade fragilities), also for basic retail products. The halt in dollar-denominated payments to intermediate good firms from countries pivotal in the Global Value Chain (GVC) induced a big dollar hunger and the exorbitant duty of the Fed to activate emergency swap lines (monetary fragilities). As days into the pandemic pass, new economic fragilities emerge that call for more profound reflections of the current economic model.