Päivi Leino-Sandberg, Vesa Vihriälä, 31 May 2021

The EU’s response to the COVID-19-induced economic crisis has been aggressive, but not without criticism. This column, part of the Vox debate on euro area reform, summarises some of the shortcomings of the way in which the EU’s Next Generation programme may play out, and suggests short- and longer-term considerations that need to be made in order to ensure that the programme strengthens the Union in the long run.

Megha Patnaik, Andrea Lamorgese, Andrea Linarello, Fabiano Schivardi, 01 May 2021

In response to COVID-19, firms had to adapt to nationwide lockdowns and social distancing measures with little to no prior experience. This column examines the role of management in firms’ responses to the pandemic in Italy, the first western country to be badly hit by the outbreak, and finds that firms with structured management practices experienced lower declines in performance during the post-lockdown period. These firms were more likely to adopt labour-related strategies in response to the lockdown, including transitions to remote work.

Jelle Barkema, Tryggvi Gudmundsson, Mico Mrkaic, 06 December 2020

Output gaps remain a popular metric for assessing the stance of countries’ business cycles. However, their usefulness for real-time policymaking is disputed due to the challenges in estimating potential output. This column studies the use of output gaps in IMF surveillance work and finds that output gap measures are skewed to the downside, often revised, and only slightly correlated with other indicators of slack. Furthermore, text analysis finds a limited connection between the size of the output gap and policy recommendations. Taken together, these results suggest caution in using output gap estimates for policymaking during the Covid-19 recovery.

CEPR Policy Research