Thomas Mayer, Michael Biggs, Andreas Pick, 14 May 2010

The observation that economies can recover from a crisis without the need for credit growth is known as a “Phoenix Miracle”. This column argues that this theory is based on an inappropriate comparison between GDP – a flow variable – and the stock of credit. If GDP is instead compared with the flow of credit, it is evident that GDP and credit recover simultaneously.

Michelle Alexopoulos, Jon Cohen, 23 December 2008

This column claims that uncertainty shocks affect on economic activity with remarkable swiftness, strength, and durability. Capturing expectations of average citizens in Main Street through the use of keywords in main newspapers, it indicates a modest decline of uncertainty since October 2008, suggesting that the worst may be behind us.

Carmine Di Noia, 20 October 2008

The current crisis has exposed the poor organisation of financial supervisory responsibilities, as central banks, EU ministers, and treasury authorities fought to respond appropriately. This column argues for the reorganisation of the European financial regulatory apparatus using a “four peaks” approach that horizontally divides responsibilities according to objectives.

Ángel Ubide, 10 October 2008

Policy has been reactive and reluctant, and politics have trumped efficiency and common sense. There are three steps that must be applied quickly and decisively: close the bad or small banks; recapitalize the good or too big to fail banks; and remove the bad assets from the system so that banks can return to lending.

Marco Terrones, M. Ayhan Kose, Stijn Claessens, 07 October 2008

The house and equity price busts on top of a credit crunch make this an unprecedented crisis for the modern US economy; its real economy effects are thus difficult to assess. This column provides insights based on evidence from 122 recessions in 21 advanced nations since 1960. Findings suggest recessions in such circumstances are much costlier and slightly longer. But the outcome can be affected by policy, and it’s high time that policymakers act swiftly and decisively.

Paul De Grauwe, 14 November 2007

Inflation targeting proponents view central banks’ responsibilities as minimalist. But the subprime crisis shows that central banks cannot avoid taking responsibilities that include the prevention of bubbles and the supervision of all institutions that are in the business of creating credit and liquidity.


CEPR Policy Research