The economic crisis brought on by the coronavirus pandemic requires fast, large, effective and well targeted fiscal stimulus. While the size of the government’s initial three spending packages is appropriate as an initial response, both the shape of that response and the design of future spending measures need to be carefully evaluated.

This paper argues that, in designing subsequent rounds of fiscal stimulus, governments should consider these principles:

• Go early: Timeliness of the stimulus is key
• Go hard: The size of the stimulus is important
• Go households: Put purchasing power with households who are more likely to spend it
• Targets domestic production
• Targets activities with high direct employment intensities
• Targets those most impacted by the crisis
• Targets useful projects that deliver co-benefits
• Targets regional disadvantage