Nauro Campos, Paul De Grauwe, Yuemei Ji, 10 October 2018

The tragedy of structural reforms is that they have been captured by policymakers. This column argues that the incessant repetition of the ‘must-reform’ mantra as a solution to the crisis has discouraged academic economists from embracing it as the important research topic it clearly is, and attempts to address the lack of adequate knowledge which makes the implementation of reforms more difficult and limits their effectiveness. 

Lucia Alessi, Peter Benczur, Francesca Campolongo, Jessica Cariboni, Anna Rita Manca, Balint Menyhert, Andrea Pagano, 26 September 2018

Over recent decades, scholars and policymakers have been exploring how to make economies more resilient to potential shocks. This column investigates which EU members showed resilience during the Global Crisis and attempts to identify characteristics associated with resilience. The results reveal a lot of heterogeneity amongst countries, and those that are more resilient in the short run are not necessarily those with superior recoveries down the line. Further analyses show that social expenditures, political stability, and competitive wages are important for impact, medium-run, and ‘bounce forward’ resilience, respectively. 

Diane Coyle, 25 September 2018

David Bell, David Blanchflower, 24 September 2018

The most widely available measure of underemployment is the share of involuntary part-time workers in total employment. This column argues that this does not fully capture the extent of worker dissatisfaction with currently contracted hours. An underemployment index measuring how many extra or fewer hours individuals would like to work suggests that the US and the UK are a long way from full employment, and that policymakers should not be focused on the unemployment rate in the years after a recession, but rather on the underemployment rate.  

Ester Faia, Sébastien Laffitte, Gianmarco Ottaviano, 20 September 2018

There is a general consensus that lax monetary policy and banking globalisation were two critical factors behind the Global Crisis. This column explores how banks’ decisions to enter foreign markets impacted their individual and systemic risk. Results from a sample of European banks suggest that banks’ foreign expansions decreased risk from both an individual and systemic viewpoint. The findings cast doubt on the idea that banking globalisation was one of the culprits behind the crisis.

Eugenio Cerutti, Stijn Claessens, Luc Laeven, 18 September 2018

The Global Crisis was a catalyst for the adoption of macroprudential policies around the world. Using newly updated data, this column examines the adoption of macroprudential policy instruments from 2000 to 2017. Since 2015, advanced economies have on average been using more instruments than emerging economies and low-income countries. While some instruments seem to be effective, it remains to be seen whether this suite of policies can deliver overall financial stability.

Simon Wren-Lewis, 17 September 2018

José De Gregorio, Barry Eichengreen, Takatoshi Ito, Charles Wyplosz, 11 September 2018

Twenty years ago, ICMB and CEPR published the first Geneva Report on the World Economy. Over these last two decades, the world of international finance has changed and so too has the IMF. This column introduces the latest report, in which the same team of authors highlight seven key developments affecting the monetary and financial environment and their implications for the Fund. 

Marcel Fratzscher, Christoph Grosse Steffen, Malte Rieth, 17 August 2018

Does inflation targeting help absorb large shocks? This column shows that it implies higher output growth and lower inflation when countries are hit by natural disasters. Hard targeting works in these cases; soft targeting does not. This has impacts for how we evaluate the success of inflation targeting during the global crisis, but also for the debate on flexible inflation targeting.

Simon Wren-Lewis, 02 August 2018

Matthieu Bussière, Menzie Chinn, Laurent Ferrara, Jonas Heipertz, 05 July 2018

The ‘Fama puzzle’ is the finding that ex post depreciation and interest differentials are negatively correlated, contrary to what theory suggests. This column re-examines the puzzle for eight advanced country exchange rates against the US dollar, over the period up to February 2016. The rejection of the joint hypothesis of uncovered interest parity and rational expectations still occurs, but with much less frequency. In contrast to earlier findings, the Fama regression coefficient is positive and large in the period after the Global Crisis, but survey-based measures of exchange rate expectations reveal greater evidence in favour of uncovered interest parity.

Laura Alfaro, Manuel García Santana, Enrique Moral-Benito, 04 July 2018

Propagation through buyer-seller interactions may amplify the aggregate impact of bank lending shocks on real activity. This column presents insights from estimating the direct and indirect effects of exogenous credit supply shocks in Spain between 2002 and 2013. Both direct and indirect effects of bank credit shocks had sizable effects on investment and output throughout the period. Trade credit extended by suppliers and price adjustments both appear to explain downstream propagation of financial shocks.

Andrew Ellul, 05 July 2018

Systemic risk has been a cause for growing concern since the onset of the Global Crisis. Andrew Ellul explains his research on the lending side of systemic risk creation, which address the types of investments financial institutions make. These investments have shifted towards equity markets, which are riskier and less liquid, and more interconnected - all of which amplifies risk in crisis.

Nicola Mai, 14 June 2018

The rise in global debt has continued unabated following the Global Crisis. This column argues that elevated debt levels will continue to put downward pressure on equilibrium interest rates across the world’s major economies, constraining central bank efforts to normalise rates and supporting the thesis that global equilibrium interest rates have fallen.

Alan de Bromhead, Alan Fernihough, Markus Lampe, Kevin O'Rourke, 22 May 2018

The literature has identified several stylised facts which characterise the nature and causes of the collapse in international trade during 2008 and 2009. This column uses detailed, commodity-specific information on UK imports between 1929 and 1933 to document several similarities between the trade collapses of the Great Depression and the Great Recession. The findings are in line with theories emphasising the composition of expenditure changes during major economic crises, or the relative sizes of firms operating closer to or further away from the margin between exporting or not.

Giordano Mion, 04 May 2018

Ten years on from the Global Crisis, productivity growth in the UK lags behind that in economies such as France and Germany. Giordano Mion shares his work on why this 'productivity puzzle' exists. The production capacity of manufacturers has not fallen much since 2008, but demand has faltered. This video was recorded at the 2018 RES Conference.

Thorsten Beck, Maria Soledad Martinez Peria, Maurice Obstfeld, Andrea Presbitero, 12 April 2018

Research has shown that financial inclusion is closely linked to economic development and growth. However, more work is needed to establish the magnitude and channels of this effect and to pinpoint the types of financial services that have a stronger payoff without threatening financial stability. This column tackles these questions by presenting new evidence from a recent IMF-DFID conference on financial inclusion. It also suggests avenues for future research on the topic.

Grégory Claeys, André Sapir, 11 April 2018

It is only in the last decade that the EU has had an active policy to reintegrate workers who lost their jobs as a result of globalisation, through the European Globalisation Adjustment Fund. This column assesses the performance of the Fund and makes three recommendations to improve its effectiveness. To be more successful, the Fund should improve its monitoring and widen the scope of its usage.

Tolga Aksoy, Paolo Manasse, 23 March 2018

After 2008, labour markets in the euro area responded differently to the recessions and subsequent labour market reforms. This column uses data from 19 countries to show that labour and product market reforms speeded up the recovery from recession, but also reduced the resilience of employment to shocks. Because the resilience effect occurs first, deep reforms risk losing public support.

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