Coins, Covid, Keynes and K-Shaped Recovery

Abstract

Reckless monetary policy, especially in the wake of a pandemic, amplifies the gap between the extreme ends of the income distribution, thus exacerbating the long term effects of income inequality and loss of human capital. Attempts of federal stimulus bills fall short in timing and size, including directing spending towards those most in need. We propose a general smart contract protocol that distributes funds to targeted individuals with programmatic spending enforceability, alleviating the K-Shape recovery that current monetary policy is creating and turn it into the desired V-Shape. Utilizing incentive structures, our model directs spending to help stimulate the economies of targeted communities and struggling businesses. Smart contracts remove the current inefficiencies in the political trust and permission-based solution and allow for more transparency, verification, and incentives to help one’s community in times of need. Such a system allows for a more positive and direct relationship between those with funds and those who need funds.

B. Mishra—Mentor.

Appendix: Linear Regression Charts

(See Figs. 3, 4, 5, 6, 7, 8 and 9)

Fig. 3.

Predictor and response variables

Fig. 4.

Response expectations

Fig. 5.

Interest rate vs unemployment

Fig. 6.

Balance sheet vs CPI

Fig. 7.

Balance sheet vs delinquencies

Fig. 8.

Interest rate vs CPI

Fig. 9.

Interest rate vs delinquencies