Policy response to COVID-19 pandemic and related future challenges

The paper reviews new standard policy response to global COVID-19 pandemic led by the IMF. It identifies new innovative approaches in the design of expansionary fiscal support measures and accommodating monetary policy. Particular attention is paid to the treatment of labor markets, job-retention measures, and worker-reallocation efforts deployed at appropriate stages of continued pandemic, initial post-COVID-19 economic recovery and longer-run investment for sustainable future growth. The paper detects inherent policy limitations in the treatment of local, national and global public goods, excessive globalization, and unregulated financial markets and capital mobility, as well as weak integration between prevailing economic policy paradigm and other social sciences. It seeks a solution in expanding economic policy framework beyond neoliberalism, by harnessing democracy and human wellbeing consistent with sustainable development goals through balanced conduct of economic policy, efficient and adequately regulated markets (as needed), and responsible and transparent state actions.