Fed’s Kaplan Says Mask Use Would Spur Growth, Curb Joblessness

Fed’s Kaplan Says Mask Use Would Spur Growth, Curb Joblessness

Bloomberg  | Jul 10, 2020 23:54

Fed’s Kaplan Says Mask Use Would Spur Growth, Curb Joblessness

(Bloomberg) -- Wide-spread mask wearing and following other health-care measures will be key to economic growth in the U.S., said Federal Reserve Bank of Dallas President Robert Kaplan.

“While monetary and fiscal policy have a key role to play, the primary economic policy from here is broad mask wearing and good execution of these health-care protocols,” Kaplan said Friday in a Fox Business interview. “If we do that well, we’ll grow faster.”

Kaplan said mask wearing could substantially mute the spread of the coronavirus, which is resurging in parts of the country and leading to a renewed halt in economic activity. Using face coverings would likely bolster reopenings and create faster growth and a lower unemployment rate.

“If we all wore a mask it would substantially mute the transmission of this disease and we would grow faster. We would have a lower unemployment rate,” he said. “We’d grow faster, and would be far less likely to slow some of our reopenings. But we’ve been uneven so far on mask wearing.”

Kaplan said he expects the U.S. economy to grow in the third and fourth quarters, but that the year overall will see a contraction of 4.5% to 5%.

He added that the economy will likely need more fiscal stimulus. Unemployment benefits will need to be continued in some form, in addition to more aid to state and local governments. The $600 additional weekly jobless benefit passed under the CARES Act in March is set to expire at the end of this month, while some 18 million people are still receiving unemployment insurance.

©2020 Bloomberg L.P.

© Bloomberg. A pedestrian wearing a protective mask carries a shopping bag outside the Saks Fifth Avenue store New York, U.S., on Wednesday, June 24, 2020. New York, New Jersey and Connecticut will require visitors from virus hot spots to quarantine for 14 days Photographer: Angus Mordant/Bloomberg

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