The Covid-19 Crisis Response Helps the Poor: The Distributional and Budgetary Consequences of the UK lockdown

19 August 2020

Patryk Bronka, Diego Collado, Matteo Richiardi

INET Oxford Working Paper No. 2020-17

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The authors nowcast the economic effects of the Covid-19 pandemic and related lockdown measures in the UK and then analyse the distributional and budgetary effects of the estimated individual income shocks, distinguishing between the effects of automatic stabilisers and those of the emergency policy responses. Under conservative assumptions about the exit strategy and recovery phase, they predict that the rescue package will increase the cost of the crisis for the public budget by an additional £26 billion, totalling over £60 billion.