, or if you expect the jump in infection rates to persist for an extremely long time, there will in theory be more limited effects on aggregate spending and a greater degree of switching across categories2. employing the economists ’ jargon, substitution from the risky activities will be more “ intra - temporal ” than “ inter - temporal ”. if, on the other hand, people expect the rise in infection rates ( and the associated restrictions ) to subside relatively quickly – and if there are also no close substitutes for the sorts of spending that expose people to infection risk – one would expect a more marked effect on aggregate consumption, and less expenditure switching. charts 5 ( a ) - ( c ) depict some simulations to get these points across. the model they ’ re based on is extremely simple and stylised. in particular, it assumes that incomes, current and expected, are held fixed, and that there ’ s no change in the degree of uncertainty about the economic outlook. the only thing that changes is the path, actual and expected, of the pandemic. this is very obviously unrealistic. household incomes have clearly been affected by the crisis. and we know from long experience that when uncertainty about people ’ s future incomes goes up, saving rates tend to rise as well. but as we saw earlier, from chart 4, household incomes have been significantly protected by the furlough schemes, at least as compared with the huge dip in national income. ( while this isn ’ t a free lunch – higher government debt has to be paid for eventually – it does spread out the cost of that dip. ) so the assumption 2 in a more general model than the one used here krueger et al ( 2020 ) also point out that the impact of the pandemic on aggregate spending is lower the closer the degree of substitutability between risky and non - risky consumption. charalampidis and guillochon ( 2020 ) and guerrieri et al ( 2020 ) also consider covid in multi - sector models. see cantore et al ( 2020 ) for a brief introduction to the epimacro literature. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice that incomes have been relatively stable may not be as unrealistic as it might have been. it ’ s in any case useful, i think, to try to separate the direct effects of the pande

a spelman college undergraduate, to hear some details about the lobbying for full employment and other economic policy objectives by one of the leaders of that movement. it is generally agreed that the legal roots of the fed ’ s employment mandate are in the employment act of 1946, itself inspired by a 1944 speech by president franklin roosevelt. 3 the law required all of the federal government to “ promote maximum employment, production, and purchasing power. ” 4 alongside the preservation of “ purchasing power, ” even then, the employment goal was linked to inflation. federal reserve chairs cited the employment act as applying to monetary policy. 5 but it was rare for the federal reserve to refer to this statutory mandate when explaining monetary policy decisions. for example, the federal reserve board ’ s annual report for 1975 noted that in public statements on monetary policy given during the year by the federal reserve chair, he had pointed to the “ the very high rates of unemployment and of idle industrial capacity then prevailing ” as a factor bearing on the federal open market committee ’ s the act, which congress passed in 1945, was inspired by franklin roosevelt ’ s 1944 state of the union message, which proposed a “ second bill of rights ” or “ economic bill of rights. ” fdr said, “ we have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. ” his list of rights included “ the right to a useful and remunerative job, ” echoed by the employment act ’ s recognition of “ the right to a useful and remunerative job in the industries or shops or farms or mines of the nation. ” the full 1944 state of the union message is available on the franklin d. roosevelt presidential library and museum ’ s website at https : / / www. fdrlibrary. org / address - text. see the declaration of policy on page 1 of the employment act of 1946, available at https : / / fraser. stlouisfed. org / files / docs / historical / congressional / employment - act - 1946. pdf. see, for example, william mcchesney martin ’ s august 13, 1957, statement before the committee on finance, u. s. senate, which is available at https : / / fraser. stlouisfed. org / files / docs / historical / martin / martin57 _ 0813. pdf? utm _ source = direct _ download. in 1971, a federal reserve board lawyer, howard hackley, wrote