Shutdown: How Covid Shook the World's Economy

by Adam Tooze

The immediate economic policy response to the coronavirus shock drew directly on the lessons of 2008. Fiscal policy was even larger and more prompt. Central bank interventions were even more spectacular. If one married the two in one’s mind—fiscal and monetary policy together—it confirmed the essential insights of economic doctrines once advocated by radical Keynesians and made newly fashionable by doctrines like Modern Monetary Theory (MMT).47 State finances are not limited like those of a household. If a monetary sovereign treats the question of how to organize financing as anything more than a technical matter, that is itself a political choice. As John Maynard Keynes once reminded his readers in the midst of World War II: “Anything we can actually do we can afford.”