Ricardo Hausmann, 17 February 2009

A lot of effort has been put into discussing issues such as global imbalances and the voting rights at the international financial institutions, but too little effort has been dedicated to thinking about what these institutions should do in the context of the current global crisis. Global and regional international institutions need to step up to a much bigger role than is currently envisioned. If this strategy is successful, it will lead to a more balanced and sustainable global recovery.

Richard Baldwin, 16 February 2009

The world is in the midst of an unprecedented economic crisis – a global event unfolding at extraordinary speed and in unanticipated directions. Now more than ever, the world needs research-based policy analysis: i) to understand this global and insanely interconnected event, ii) to formulate plans for alleviating its worst effects, and iii) to fix the system so it doesn’t happen again. Vox’s Global Crisis Debate is a vehicle for agglomerating ideas on these issues.

Thomas Philippon, 15 February 2009

Proposals for financial regulatory reform are everywhere. This column presents an opinionated synthesis of the key issues and proposals with the aim of focusing and stimulating the debate.

John Williamson, 14 February 2009

The IMF was created in part to help small economies deal with cyclical downturns. Yet few nations turn to the IMF except as a last resort. It sits hardly utilized in the face of the most severe shock the world has faced since the outbreak of WW I. This column argues that changing this unacceptable outcome requires two types of reforms.

Charles Calomiris, 12 February 2009

The financial crisis happened because the rules of the game – shaped by government policy – promote the wilful undertaking of excessive, value-destroying risks by managers who were not effectively disciplined by shareholders. This column outlines the six key areas where regulatory reform is essential to preventing a repeat.

Antonio Spilimbergo, Steven Symansky, Olivier Blanchard, Carlo Cottarelli, 12 February 2009

The global crisis demands bold initiatives to i) rescue the financial sector, and ii) boost aggregate demand, with early resolution of financial sector problems being a necessary condition for the stimulus to work. Since monetary policy is at the end of its rope, early, strong, and carefully thought-out fiscal policies are urgently needed. Time and action are of the essence if we are to avoid a contraction larger than any we’ve seen since the 1930s.

Enrico Perotti, Javier Suarez, 11 February 2009

Most financial system reform proposals rely on better managed, anti-cyclical capital requirements, or some sort of insurance. This column argues that mandatory liquidity insurance would be more effective. The insurance premiums – linked to maturity mismatch and term structure – would essentially be pre-payment for the cost of future financial crises and held in an Emergency Liquidity Insurance Fund.

Viral Acharya, Matthew Richardson, 07 February 2009

How did global finance become so fragile that a collection of bad mortgages in the US could bring the entire system to its knees and the global economy along with it? How can this fragility be eliminated? This column describes the answers provided in an important new book which has been written by a team of world-class scholars from NYU’s business school.

Daniel Gros, 05 February 2009

Uncertainty over losses from toxic assets is blocking the resumption of bank lending – thus prolonging and deepening the recession. Governments should take over these assets to kick-start credit markets, but to avoid the “market for lemons” problem, the bad bank should be big, and banks should be forced to transfer their entire portfolio of toxic assets.

Thomas Philippon, 02 February 2009

Evidence from a new century-long dataset suggests that the key factors driving relative wages in the financial sector have been regulation and corporate finance activity, followed by financial innovation. Over the past decade, however, “rents” account for 30% to 50% of the sector’s wage differential. In this sense, financiers are overpaid.

Jeffry Frieden, 02 February 2009

If the crisis turns into a new Great Depression, it will most likely be due to a breakdown of cooperation among the major economies. But sustaining international cooperation requires domestic support; ignoring the demands of poor and middle-class citizens for relief will inflame more extreme anti-globalisation views, making international cooperation much more difficult.

The Editors, 28 January 2009

VoxEU.org today launches the Global Crisis Debate. The aim is: 1) To broaden the discussion into a truly global debate, and 2) To make the Global Crisis Debate the dominant intellectual forum on the crisis. Thanks to the partnership with the UK government, analysis on the Global Crisis Debate feeds into preparations for the April Summit via the UK Government's web site LondonSummit.gov.uk.

Edwin Truman, 28 January 2009

The G20 leaders meeting in London on April 2 should complete the unfinished business of IMF reform. These are essential not only to reinstate the legitimacy and relevance of the IMF but also to support restoration of economic growth and stability to the global financial system.

Trevor Houser, 28 January 2009

A range of fiscal programs yield both economic stimulus and sustained environmental benefits. This column argues that Washington and Beijing should lead the way, improving their energy efficiency and building faith in the stability of the global economy.

Charles Wyplosz, 28 January 2009

A product of the confused reaction of politicians to the crisis, the G20 forum must prove its usefulness. Rather than striving to coordinate fiscal policy responses, leaders should use the G20 platform to strike common ground on long-term reforms to global financial regulation and supervision, starting by recapitalising the IMF and reforming its governance structures.

Dani Rodrik, 28 January 2009

The global crisis is an opportunity for developing nations to project their interests in multilateral institutions, and gain influence in shaping economic globalisation. To make the best of this outcome, developing nations need a good sense of their interests and priorities, but also to recognize that having a greater say entails acceptance of greater responsibilities.



CEPR Policy Research