Long Chen, Michael Spence, 17 July 2020

The pandemic economy has exhibited sharp and, in many cases, deep contractions across a wide range of countries. Mobility has turned out to be a key factor in the co-evolution of the economy and the pandemic. This column estimates the magnitude of daily economic contractions by constructing a pandemic economy tracker based on mobility data and makes an important set of findings. First, speed of policy response is crucial in successfully navigating the pandemic economy. Second, it is substantially more difficult for larger economies to control the virus. Third, stock markets have generally rebounded faster than the economies they support. Finally, third wave countries, primarily emerging and developing economies, are having difficulty controlling the virus without substantial mobility restrictions and contractions.

Ashoka Mody, Milan Nedeljkovic, 14 January 2019

The ECB’s actions in the wake of the Global Crisis have been described as hesitant, relative to other central banks. Based on analysis of financial markets' response to the ECB's interventions during the euro crisis, this column argues that central bank interventions are effective if they clearly signal a commitment to reinvigorating the economy and if they address the source rather than the symptom of financial stress. The ECB did not follow these principles, limiting its ability to improve financial market sentiment. 

Atsushi Nakajima, 27 March 2018

As the global economy continues to recover, trade frictions between advanced and emerging economies have started to appear. This column considers how Japan can continue its recent trend of economic expansion by addressing domestic growth opportunities while remaining resilient to international trade challenges. Both technological innovation and new business models are key to achieving this.

Silvana Tenreyro, Gregory Thwaites, 12 November 2013

Governments wary of fiscal expansion have turned to monetary policy to stimulate slowly recovering economies. This column presents evidence that lowering interest rates is ineffective during recessions – just when fiscal policy would be most effective. If this result is robust, we are seeing recent signs of recovery in spite of austerity, not because of it.

Scott Baker, Nicholas Bloom, Steven Davis, John Van Reenen, 29 October 2012

The US recovery is painfully slow and monetary policy is at its limits. Pervasive economic uncertainty appears to be holding the US back. But what is the root cause of this uncertainty? This column argues that a polarised political system is to blame. Without a political mechanism that incentivises the election of moderate politicians, the authors predict further political divergence between Republicans and Democrats over the coming years and a consequent intensification of policy uncertainty.

Scott Baker, Nicholas Bloom, Steven Davis, 20 June 2012

The on-then-off economic recovery in the US and Europe is one of the many mysteries of the post-crisis economy. This column provides some evidence that policymakers’ indecisiveness may be part of the cause. Because policymakers act decisively when things get bad and dither when things get better, corporate and consumer demand stalls just as the recovery gets going.

Prakash Kannan, Marco Terrones, Alasdair Scott, 06 May 2009

Two features of the current recession – its association with a deep financial crisis and its highly synchronised nature – suggest that it is likely to be unusually severe and followed by a weaker-than-average recovery. Current and near- term policy responses are the key to understand how the recession will evolve this time.

Olivier Blanchard, 10 June 2003

Written June 2003: Between falling oil prices, aggressive macro policies and the falling dollar, it is hard to see what stands in the way of a strong recovery in the US. But in Europe, monetary caution, self-imposed fiscal constraints and euro appreciation all point to the dual dangers of deflation and a prolonged slump.


CEPR Policy Research