Charles Manski, 12 June 2020

Formation of COVID-19 policy must cope with many substantial uncertainties about the nature of the disease, the dynamics of the pandemic, and behavioural responses. This column argues that instead of making policy that is optimal in hypothetical scenarios but potentially far from optimal in reality, it is more prudent to approach COVID-19 policy as a problem in decision making under uncertainty. Under ‘adaptive diversification’, a range of policies would be implemented across locations and policymakers would be able to revise the proportion of locations assigned to each policy as evidence accumulates.

Lucrezia Reichlin, Dirk Schoenmaker, 26 March 2020

Fiscal and monetary policy coordination is not working in the euro area. This column argues that in order to rebalance the weight of both during major crises, the asymmetry between decision making at the ECB (by majority voting) and the ESM (by unanimity or qualified majority) must be harmonised. This is urgent since the ESM is the only instrument available to provide the common fiscal capacity needed to fight the COVID-19 pandemic.

Bartosz Maćkowiak, Mirko Wiederholt, 19 March 2020

Economists may not have been able to do much about the outbreak of the coronavirus, but this column argues that economics can help tackle the problem at its source by reducing the spread of the virus. Using a theory of decision-making by agents who have limited information-processing ability, it offers various recommendations for individuals and policymakers to limit the spread of COVID-19.

Oliver Hart, 19 June 2017

Contracts can’t specify everything, as it requires being far-sighted and foreseeing every possible event. In this video, Oliver Hart discusses who gets to decide on the left-out elements, and how control rights are allocated. This video was recorded at the Royal Economic Society Annual Conference held in Bristol in April 2017.

Nicola Lacetera, Devin Pope, Justin Sydnor, 20 May 2011

People like to take shortcuts and this affects how we make decisions. Looking at auctions of more than 22 million used cars in the US, this column finds that buyers will often only pay attention to the first few digits of mileage. So if you have driven your car 30,000 miles, you might have to sell it for $200 less than if you had driven in 29,999 miles.


CEPR Policy Research