Kristian Behrens, Manassé Drabo, Florian Mayneris, 01 February 2022

Cities are more vulnerable to economic shocks than to physical destruction. Yet, little is known about the factors that enhance their resilience to such shocks. This column uses data from Canada to show that cities that are more severely hit by big-plant closures and mass layoffs see their population shrink, especially among the young and working-aged residents. However, the initial presence of public and cultural services helps mitigate the adverse effect of massive job displacement on a city’s population.

Elena Bobeica, Benny Hartwig, Christiane Nickel, 20 August 2021

The initially muted reaction of euro area inflation to the recent recession suggests that the Phillips curve is flat or may have flattened during the pandemic. This column argues that the assessment of the Phillips curve has become more complicated due to numerous confounding factors. It discusses evidence that underlying inflationary pressures have been dampened by the build-up of slack, and that models accounting for tail events reveal more stable Phillips curve parameters. Despite the many confounding factors, it seems that the Phillips curve is still at play – even if it is hard to pin down precisely.

Kristian Behrens, Brahim Boualam, Julien Martin, 03 January 2018

Policymakers strive to encourage resilience among firms. We often assume that industry clustering creates resistance to shocks. This column uses the evidence from Chinese imports in the Canadian textile industry to show that firms in clusters were in fact no more resilient to the ‘China shock’.

Stefano Micossi, 20 August 2016

Some economists are approaching a consensus that the Eurozone’s financial architecture is now resilient enough to withstand another shock similar to that of 2010-11. This column argues that such a view may be overly optimistic. Economic and financial instability persists in member states and the banking sector, and institutions to tackle a shock remain incomplete. While the Eurozone remains vulnerable to a bad shock, the blanket application of burden sharing without consideration of current economic and financial conditions is unwise.

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