Our analysis finds that, at the peak of the crisis, such schemes halved the share of firms under liquidity stress and reduced “employment at risk” by almost two-thirds4. This week governments also announced their planned fiscal measures for 2021, which suggest that Member States plan to provide sizeable fiscal support to their economies next year.
The other implication of the rise in the relative price of commodities is economic adjustment, by which I mean the reallocation of labour and capital from weaker sectors to stronger sectors. The manufacturing sector, faced with higher costs for energy and other inputs, new sources of competition from Asia, and a stronger Canadian dollar, is going through a difficult adjustment.