The US government will likely need to end up at least doubling its $2 trillion coronavirus economic rescue package, according to a Nobel prize-winning economist.

Professor Edmund Phelps of New York’s Columbia University told Econ Films’ CoronaNomics show that the $2 trillion support package passed by Congress and signed into law by Donald Trump last month in order to help the US economy cope with the shock of the Covid-19 lockdown was likely to prove insufficient.

“I think it was probably the first crack at the problem and there certainly will be more to come,” he said, speaking from his home in Manhattan where the 86-year-old is in lockdown.

“Certainly they could need to do another $2 trillion. We could do another one just the same size. Then there’ll be a wait and see. And conceivably it’ll be a third one depending on what the needs seem to be.”

A tripling of the package would take it to $6 trillion, almost a third of US GDP.

The original $2 trillion package – known as the Coronavirus Aid, Relief and Economic Security Act – was signed into law by the President on 27 March.

It includes $290bn in cheques for US households, $500bn in loans for large firms including airlines, $150bn in additional health spending and $350bn in government-guaranteed loans for small businesses.

The pot of money for small business loans, which provided funds to cover companies’ payroll and prevent layoffs, ran out two weeks after it was set up.

The Senate this week approved an additional $320bn in funding for the program.

Mr Phelps won the Nobel – the highest honour in economics in 2006 – for his work on how people’s expectations’ influence inflation, which helped revolutionise economic policymaking in the 1980s and 1990s.

But more recently his work, at Columbia’s Center on Capitalism and Society, has focused on how to encourage and stimulate the private sector innovation that drives economic growth.

Mr Phelps has been an advocate of free markets and a limited role for the state.

But he told CoronaNomics that the nature of the economic emergency had persuaded him that it was vital for the governments to intervene extensively in the private economy to ensure it can survive this crisis.

“To my horror, I find myself OK-ing temporary corporatism,” he said.

“Corporatism historically has been a disaster for lots of countries and we don’t want to go down that road. Capitalism is a thousand times better, but now we’re in a paradoxical situation in which we got to save capitalism. [And] to save capitalism, we’re going to need the government to spend some money to prop up failing corporations.”

Since the US support package was passed US unemployment insurance claims have exploded, with 22 million people making claims now seeking assistance.

Some economists have said that the US unemployment could ultimately shoot above 20 per cent, heights not seen since the Great Depression of the 1930s.

The unprecedented surge in layoffs has led to calls for still more government assistance to households and businesses.