Guillermo Calvo, Rudy Loo-Kung, 10 December 2008

Emerging markets are weaker than the G7, and if they undertake expansionary monetary and fiscal policies like the G7, inflation and capital flight are likely surge. This column argues international financial institutions must take an unprecedented role in bailing out emerging markets as there is the serious risk that they resort to protectionism and nationalisation.

Helmut Reisen, 06 December 2008

The global credit crisis is testing the resilience and sustainability of emerging markets’ policies, this column warns. Even strong performers are not shielded against pure financial contagion, although they may well recover quickly once confidence is restored. In the future, development finance is likely to rely less on private debt.

Sylvester Eijffinger, 03 December 2008

In CEPR Policy Insight No 27, Sylvester Eijffinger discusses the crisis management in the EU. The paper describes the development of the crisis with the denial phase, the discovery phase and the disposal phase of the crisis. It also analyzes the nationalization of banks and the three conditions that need to be fulfilled to make a bailout as unattractive as possible.

Barry Eichengreen, Richard Baldwin, 10 November 2008

Leaders of the G20 nations are meeting this weekend to discuss financial markets and the world economy. Announced just a few weeks ago, this summit is both very unprepared and very important. The world economy and world financial markets are in a delicate state. This eBook from VoxEU.org collects essays from some of the world's leading economists on what the G20 should do.

Sylvester Eijffinger, 04 December 2008

This column introduces the newest Policy Insight on what the EU has been doing and should be doing in terms of managing the global crisis.

Eric Hughson, Marc Weidenmier, 28 November 2008

The current crisis raises serious questions about the role of a lender of last resort. This column provides historical insight into its importance. Such a lender is critical to containing crises, as demonstrated by the frequent autumn harvest financial crises in the US prior to the establishment of the Federal Reserve.

Arvind Subramanian, 28 November 2008

It is undeniable that India's foreign exchange reserves have helped in limiting the impact of the crisis. This column suggests that, if the Indian government wants to cushion against all potential capital outflows of a future crisis, reserves of $1 trillion would not seem excessive.

Richard Dale, 27 November 2008

Recent events have not been kind to the modern financial market structure. This column blames the prevailing consensus amongst finance academics for underestimating the irrationality and instability involved. Has the discipline failed to understand global financial markets?

Wendy Carlin, Andrea Boltho, 26 November 2008

Germany is in better shape than many to weather the financial crisis. But, this column argues, it needs to raise private consumption with a substantial fiscal stimulus and higher real wages, lest it run the risk of slipping into combined stagnation and deflation.

Peter Auer, Raphael Auer, Simon Wehrmüller, 21 November 2008

What is causing the mass US layoffs, decreased demand or more expensive financing? This column presents new research showing that two-thirds of the variation in employment across companies is due to their varying dependence on credit. In short, cheap capital is important for employment.

Joshua Rauh , Luigi Zingales, 19 November 2008

A GM bailout would delay restructuring and ultimately destroy jobs. Restructuring under Chapter 11 is the best solution, but credit market conditions require the US government to provide transitional, “Debtor in Possession” financing. To avoid political interference, the actual lending decisions should be made by a commercial bank with a stake in the outcome

Nicholas Bloom, 18 November 2008

Every economist is predicting a macabre 2009, but no one knows for sure how bad things will get or who will survive. This column, by comparing the current crisis to uncertainty shocks of the last 40 years, predicts GDP growth could be reduced by as much as 4.5%. But, if politicians protect free markets, growth should be back in 2010.

Carmen Reinhart, Vincent Reinhart, 09 May 2010

First posted 17 November 2008, this column's analysis is more relevant than ever. It asks why investors rush to government securities when the US was at the epicentre of the financial crisis? This column attributes the paradox to key emerging market economies’ exchange practices, which require reserves most often invested in US government securities. America’s exorbitant privilege comes with a cost and a responsibility that US policy makers should bear in mind as they address financial reform.

Lasse Pedersen, 15 November 2008

What is liquidity? Why is it at the heart of the crisis? How can we fix it? This column explains it all in terms any trained economist can understand.

Peter Draper, 14 November 2008

This column suggests that South Africa should focus on four broad issues at the coming G20 Summit: supporting global growth, supporting regulatory reform and reconfiguring the IMF, supporting reform of Asian currency management practices, and underlining support for the Doha Round of WTO negotiations.

Richard Portes, 12 November 2008

The financial crisis offers opportunities for reform. This column argues the IMF and Financial Stability Forum should be refocused and beefed up, the G7 scrapped, the G20 reshuffled, and group memberships suited to the issues. On November 15, leaders should agree on principles, rather than getting bogged down in details, and explain their reforms to the public.

Zsolt Darvas, 11 November 2008

Some new EU member states that have not yet adopted the euro have come under much greater pressure during the financial crisis than nations in the euro area. This column says that that does not mean the Maastricht criteria for euro entry ought to be relaxed. New member states suffering in the crisis are paying the price for their policy mistakes.

Arvind Subramanian, 01 November 2008

Financially integrated India has been hit by the financial contagion. This column explains what Indian policymakers need to do in order to restore confidence in the financial system and avoid the risks of easing monetary policies. The time has come for the Reserve Bank of India to use its foreign exchange reserves to inject liquidity into the financial system.

Daniel Gros, Stefano Micossi, 30 October 2008

The euro is plunging and EU banks are coming under renewed pressure. There is a strong demand for ‘European’ bonds as well as a need for massive government capital infusions to prevent the crisis from getting worse in the banking sector and the European periphery. This is why the EU should set up a massive European Financial Stability Fund.

Luc Laeven, 31 October 2008

A new IMF database, which covers the universe of systemic banking crises from 1970 to 2007, shows that the average fiscal cost was about 15% of GDP, or three times the US’s $700 billion. This column points out that quick action often lowers the ultimate cost. Moreover wishful thinking teamed with regulatory forbearance and bank liquidity plans often raises the cost by delaying vital, but politically painful, government action.

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