News & Commentary:

Articles/Commentary

The Federal Reserve unshackled
Gillian Tett (FT) Apr 1, 2020
US central bank goes beyond 'America First' to help stabilise the financial system.

Reflections on the stock market downturn
John Lee (FT) Apr 1, 2020
My portfolio is down about 35 per cent, but I'm sticking with my small-cap heroes.

Developing countries scramble for funds to stave off virus impact
Delphine Strauss and Jonathan Wheatley (FT) Apr 1, 2020
IMF and World Bank face overwhelming demand for finance with limited resources.

Will the coronavirus crisis rehabilitate the banks?
David Crow, Stephen Morris, and Laura Noonan (FT) Apr 1, 2020
Lenders that triggered financial crash are now being asked to funnel stimulus money to companies and individuals.

In the coronavirus crisis investors cannot rely on the old playbooks
Robin Wigglesworth (FT) Apr 1, 2020
The tumult over the viral outbreak is like nothing markets have ever witnessed.

Covid-19 reveals the dread of a 'non-polar' world
Janan Ganesh (FT) Apr 1, 2020
The two great powers cannot lead and there is no persuasive coalition to replace them.

Globalisation and national resilience can coexist
Martin Sandbu Apr 1, 2020
Disease spreads along trade routes, but so do the knowledge and resources to beat them.

Why the Global Recession Could Last a Long Time
Peter S. Goodman (NYT) Apr 1, 2020
Fears are growing that the worldwide economic downturn could be especially deep and lengthy, with recovery limited by continued anxiety.

The High Cost of Low Interest Rates
James Grant (WSJ) Apr 1, 2020
Irresponsible policy from the Federal Reserve made the coronavirus crisis worse than it had to be.

Lower the Rent During the Coronavirus Pandemic
Richard Thaler and Jeff Severts (WSJ) Apr 1, 2020
Keep landlords and tenants together with a one-page lease addendum.

The US, China and Asia after the pandemic: more, not less, tension
Ryan Hass and Kevin Dong (EAF) Apr , 2020
Many American policymakers view coordination with China on COVID-19 response as a self-harming exercise in a zero-sum competition for global leadership.

The COVID-19 Crisis Is the Time for the World Bank to Embrace Bold Economic Policies
Clemence Landers (CGD) Apr 1, 2020
It is often said that governments "fight the last war" during times of economic crisis. But based on David Malpass' remarks from last week's G20 Finance Ministers call, it appears the World Bank is preparing to fight the wars of the 1990s by revamping old—and largely discredited—crisis policy prescriptions to address what is likely to be a severe economic downturn caused by the COVID-19 pandemic.

As the Virus Worsens, Garment Workers Get the Shaft
Adam Minter (Bloomberg View) Apr 1, 2020
Southeast Asia's factory workers are already feeling the pain from the coronavirus. Western apparel brands shouldn't abandon them.

Coronavirus Exposes India's Official Callousness
Mihir Sharma (Bloomberg View) Apr 1, 2020
The government should have anticipated how a nationwide lockdown would impact the urban poor.

Avoiding the Stock Wreckage Was a 50-50 Call
John Authers (Bloomberg View) Apr 1, 2020
Investors who stuck to a conservative asset allocation between equities and bonds would have emerged unscathed.

If the Virus Hadn't Caused the Crash, Something Else Would Have
Satyajit Das (Bloomberg View) Apr 1, 2020
The pandemic has exposed the vulnerabilities of a structurally unsound financial and economic system.

Trillions in Rescue Aren't Coming From China
Anjani Trivedi (Bloomberg View) Apr 1, 2020
Breaking out special last-ditch bonds won't raise stimulus to levels the world hopes. Beijing is too constrained.

The Financial Market's Stress Is All About the Dollar
Marcus Ashworth (Bloomberg View) Apr 1, 2020
The critical faultline in the selloff has been the sudden strength of the greenback, as banks and investors liquidate assets and scramble for cash.

Ebola Lessons for Fighting COVID-19
Ngozi Okonjo-Iweala (Project Syndicate) Apr 1, 2020
The Democratic Republic of Congo will soon pass a milestone marking its success in the fight against Ebola. As Africa braces for COVID-19, one lesson from the DRC is that the best hope for defeating the coronavirus is not social distancing, but a vaccine that is distributed equitably.

The Priority for the Social-Distancing Period
Michael Spence (Project Syndicate) Apr 1, 2020
With COVID-19 quickly spreading around the world, much of the attention has correctly centered on the need for social distancing to slow transmission of the virus. But limiting human interactions should be regarded as merely the first step in a more comprehensive targeted strategy.

Tax Policy and Lumpy Investment Behavior: Evidence from China's VAT Reform
Zhao Chen, Xian Jiang, Zhikuo Liu, Juan Carlos Suárez Serrato, and Daniel Yi Xu (VoxChina) Apr 1, 2020
To stimulate investment and promote production efficiency, the Chinese government has undertaken a series of value-added tax (VAT) reforms. One of those reforms, in 2009, reduced not only the purchasing price of equipment, but also investment frictions, i.e., the price gap imposed by the pre-reform VAT system between new and used equipment. We find that this reform increased equipment investment by 36% and, more importantly, the increase was driven by investment spikes (i.e., investment greater than 20% of capital stock). Using a dynamic investment model, we find that tax policies that directly reduce investment frictions, such as investment tax credits, are more effective in stimulating investment than policies such as corporate income tax cuts or bonus depreciation.

COVID- 19, inequality, and gig economy workers
Mark Stabile, Bénédicte Apouey, and Isabelle Solal (VoxEU) Apr 1, 2020
While some countries have provided assistance to workers unable to perform tasks from home during the COVID-19 pandemic, certain categories of workers tend to fall through the cracks of these programmes. This column reports the findings of a survey of precarious workers in France, including gig economy workers such food delivery bikers. Traditional gig economy workers with incomes under €1,000 a month were more likely to keep working despite the highly elevated health risk of doing so, suggesting that the support in place is leaving some low-income workers exposed.

The COVID concussion and supply-chain contagion waves
Richard Baldwin (VoxEU) Apr 1, 2020
COVID-19 containment policies first shuttered factories in China. Since manufacturers around the world rely on Chinese inputs, Chinese industrial disruption hit other nations via 'supply-chain contagion'. As China gears back up having mastered the first epidemic wave, the explosions of cases in the two other manufacturing giants, Germany and America, are likely to create reverse supply-chain contagion – the industrial equivalent of reinfection. International coordination may reduce the chances that multiple waves of supply-chain contagion hobble global manufacturing until a vaccine is developed.

Coping with a dual shock: COVID-19 and oil prices
Rabah Arezki and Ha Nguyen (VoxEU) Apr 1, 2020
Countries in the Middle East and North Africa face a dual shock from the COVID-19 pandemic and a collapse in oil prices. This column explores the policy options available to deal with such shocks, arguing that authorities should sequence and tailor their responses. MENA countries should first focus on responding to the health emergency and economic depression, postponing fiscal consolidation linked to the persistent drop in oil prices until the recovery from the pandemic is well underway.

The impact of COVID-19 on education
Simon Burgess and Hans Henrik Sievertsen (VoxEU) Apr 1, 2020
The global lockdown of education institutions is going to cause major (and likely unequal) interruption in students' learning; disruptions in internal assessments; and the cancellation of public assessments for qualifications or their replacement by an inferior alternative. This column discusses what can be done to mitigate these negative impacts.

Economic Policies for the COVID-19 War
Giovanni Dell'Ariccia, Paolo Mauro, Antonio Spilimbergo, and Jeromin Zettelmeyer (VoxEU) Apr 1, 2020
The success of the pace of recovery will depend crucially on policies undertaken during the crisis.

How to Pandemic-Proof Globalization
Shannon K. O'Neil (FA) Apr 1, 2020
Redundancy, not reshoring, is the key to supply chain security.

A solvent insurance industry is vital for all
FT View Apr 2, 2020
Changing the rules of policies would set a dangerous precedent.

China's economy has yet to reach bottom
Tom Mitchell (FT) Apr 2, 2020
Despite improving manufacturing sentiment, Xi Jinping likely to face high unemployment.

Coronavirus will change the way the world does business
Beata Javorcik (FT) Apr 2, 2020
Businesses will be forced to rethink their global value chains, shaped to maximise efficiency and profits.

Lockdown could be worse than disease in poor countries
David Pilling (FT) Apr 2, 2020
Instructing people to stay at home is to confine millions to cramped housing.

Trump's Oil Summit
WSJ Apr 2, 2020
Tariffs and quotas won't solve a price shock caused by a pandemic and a Saudi Arabia-Russia feud.

Our economy may be sliding toward a depression
Robert Samuelson (WP) Apr 2, 2020
Our situation increasingly resembles the early 1930s.

The pandemic is about to devastate the developing world
Brian Klaas (WP) Apr 2, 2020
Vulnerable populations across the world are poised for the impact.

Saudis blow off Trump with a tsunami of oil
Alison Tahmizian Meuse (AT) Apr 2, 2020
Trump tweets hopes for a Saudi-Russian truce, but US shale may have to pitch in.

Gentle commerce and brutal trade
Alain Garrigou (LMD) Apr 2, 2020
Montesquieu should have paid more attention to the relationship between trading and infection — where goods go, disease follows — because as a young man he lived through Europe's last major outbreak of plague, in Marseilles in 1720.

The unequal cost of coronavirus
Renaud Lambert & Pierre Rimbert (LMD) Apr 2, 2020
War, revolution, state failure and lethal pandemics have all been known to reduce inequalities within a society. Will the coronavirus crisis reset society's priorities towards health and equality, or will it be back to business as usual?

Bureaucrats Can't Fix This
Frank Shostak (Mises Wire) Apr 2, 2020
Bureaucrats cannot conjure wealth from nothing. They only have what they extract from the private sector. Unfortunately, the bureaucrats are now starving the private sector of funding while making government budgets ever larger.

How Easy Money Is Increasing the Devastation of the COVID-19 Panic
Brendan Brown (Mises Wire) Apr 2, 2020
Central banks have created a brittle economy without real savings and without much room to maneuver. Central banks now want more of the same in a bid to fix what they broke.

From Hurting to Healing
Joachim Fels and Andrew Balls (PIMCO) Apr 2, 2020
We expect the global economy and financial markets to transition from intense near-term pain to gradual healing over the next six to 12 months.

In Global COVID-19 Response, New CGD Research Shows China Should Lead on Poor Country Debt Relief
Scott Morris, Brad Parks and Alysha Gardner (CGD) Apr 2, 2020
World Bank president David Malpass and IMF managing director Kristalina Georgieva have called for debt relief for lower-income countries in response to the COVID-19 pandemic. But even prior to the pandemic, a large share of these countries were already in debt distress or at high risk of debt distress—44 percent today, up from 23 percent just six years ago.

Chinese SOEs should help fund China's response to pandemic
Tianlei Huang (PIIE) Apr 2, 2020
Despite Beijing's recent signal that it is ready to launch a larger-scale fiscal stimulus to help battle the economic fallout from the coronavirus pandemic, its fiscal space is running tight. For the Chinese government to control its growing deficit—estimated by the International Monetary Fund to be 9 percent of GDP in 2019, including both on-budget fiscal deficit and off-budget spending—it has to find a way to collect more nontax revenue. One rightful way to do so is to make its state-owned enterprises (SOEs) pay their fair share.

Europe should seize oil price windfall to fund its pandemic response
Jacob Funk Kirkegaard (PIIE) Apr 2, 2020
The global economic and health crisis is causing consumer demand to fall and oil prices to decline, which is what one would expect. But this collapse is also taking place against the backdrop of an all-out price war between Russia and Saudi Arabia, leading to the lowest fossil fuel prices in nearly a generation. Governments should seize on this trend as a windfall. They should tax the oil price decline away and use the revenue to fund emergency measures fighting the COVID-19 pandemic.

Fed's bond-buying world records in responding to COVID-19 drew on planning, training, and infrastructure
Simon Potter (PIIE) Apr 2, 2020
The Federal Reserve Bank of New York has set a number of central banking world records in recent weeks. Among them are buying the most bonds in one operation, buying the most bonds in a day, and buying the most bonds in a week. As many have noted, at this rate the New York Fed at the direction of the Federal Open Market Committee (FOMC) will have bought more bonds and offered more money to borrowers in one month than it did during the whole global financial crisis (GFC).

A temporary, common fiscal stimulus to answer the mayhem of COVID-19
Francesco Papadia (Bruegel) Apr 2, 2020
We are not in normal times and we have to surpass, albeit only for the duration of the COVID-19 shock, the hurdles that did not allow the euro-area to endow itself of a common fiscal policy.

The Value of Opacity in a Banking Crisis
Haelim Anderson and Adam Copeland (FRBNY Lib St Econ) Apr 2, 2020
During moments of heightened economic uncertainty, we often observe regulators limiting access to bank level information with the goal of restoring the public's confidence in banks. Thus, information management often plays a central role in ending financial crises. The authors offer highlights from their recent working paper, demonstrating that in a crisis, a policy of suppressing information about banks' balance sheets has a significant and positive effect on deposits.

Negative Oil Prices? They're Already Here
Clara Ferreira Marques (Bloomberg View) Apr 2, 2020
With demand evaporating and storage tanks filling up, some producers are paying customers to take their output.

Credit May Be the Crisis Opportunity. No Joke
John Authers (Bloomberg View) Apr 2, 2020
Governments will be reluctant to permit bankruptcies and defaults, as the post-Lehman bailouts showed.

Coronabonds Could Save Europe, or Sink It
Andreas Kluth (Bloomberg View) Apr 2, 2020
It's too bad the European Union is talking about "euro bonds 2.0" again, when it should be talking about "Hamilton bonds."

Ending Coronavirus Jobless Benefits for Millions Will Be Tricky
Conor Sen (Bloomberg View) Apr 2, 2020
The economy will revive slowly, and the U.S. needs a plan to scale back payments to match that.

Covid-19 presents stark choices between life, death and the economy
Economist Apr 2, 2020
The trade-offs required by the pandemic will get even harder.

How Democracies Can Beat the Pandemic
Maciej Kisilowski and Anna Wojciuk (Project Syndicate) Apr 2, 2020
Contrary to the popular media narrative, the COVID-19 pandemic has not strengthened the case for Chinese-style authoritarianism so much as it has given the lie to illiberal populism. With national unity governments, the world's democracies would be well positioned to confront the coronavirus head on.

China and America Are Failing the Pandemic Test
Joseph S. Nye, Jr. (Project Syndicate) Apr 2, 2020
All national leaders must put their country's interests first, but the important question is how broadly or narrowly they define those interests. Both China and the US are responding to COVID-19 with an inclination toward short-term, zero-sum approaches, and too little attention to international institutions and cooperation.

Pandemics and Progress
Prince El Hassan bin Talal (Project Syndicate) Apr 2, 2020
The COVID-19 pandemic threatens to push the world's social, political, and economic structures to the breaking point, and overcoming the crisis will require resilience. Real success will lie in rediscovering and institutionalizing the true value of compassion, respect, and generosity in the weeks and months ahead.

The new inequalities and people-to-people social protection
Nora Lustig and Nancy Birdsall (VoxEU) Apr 2, 2020
The pandemic has created a new, brutal inequality: between those who have a steady source of income and those who do not. This column provides some examples of how the plight of the latter is inspiring a new kind of informal, people-to-people social protection. While this is not a substitute for a publicly financed social safety, it can fill critical gaps and foster the solidarity and trust that is key to citizens' support for more comprehensive social protection during the next crisis.

Baby boomers and the housing market on the cusp of COVID-19
Marijn Bolhuis and Judd N. L. Cramer (VoxEU) Apr 2, 2020
The effects of the COVID-19 pandemic on public health will have major repercussions for the global economy, impacting trends in many different sectors. This column uses detailed neighbourhood-level data to evaluate the impact of demographic changes on different segments of the US housing market. As larger homes (and those in neighbourhoods with relatively more baby boomers) lag behind the broader market in terms of price growth, they also appear increasingly difficult to sell. In the wake of COVID-19, a large share of the US population is at risk of taking a substantial hit to their asset portfolio, just as they retire.

Some micro/macro insights on the economics of coronavirus: Part 1
Christian Gollier and Stephane Straub (VoxEU) Apr 2, 2020
Economists have long argued that there is a conflict between the need to make individuals and companies accountable on the one hand, and the need to share risks effectively on the other. This column, the first in a three-part series, argues that in the context of COVID-19, the reluctance to share risk based on 'moral hazard' has no reason to exist, and discusses how the socialisation of losses could be implemented.

Global Currency Accord Is Necessary, But Unlikely
Will Hickey (YaleGlobal) Apr 2, 2020
In the midst of the COVID-19 pandemic, investors seek safety and hoard dollars; stabilization is required.

The Oil Collapse
Daniel Yergin (FA) Apr 2, 2020
A pandemic and a price war have together brought energy markets to a crisis.

Trump Just Missed a Perfect Opportunity to Reassert American Leadership
Ash Jain (FP) Apr 2, 2020
The G-20 helped beat Ebola. Why can't it do the same for the coronavirus?

Pandemics Are the Dark Side of Global Mobility
John Upton (Nautilus) Apr 2, 2020
How the 2009 swine flu raced around the world.

Urgent action is needed to help world's poorest
FT View Apr 3, 2020
Coronavirus pandemic threatens a human and economic catastrophe.

Emerging market debt burdens may be sorely understated
Jonathan Wheatley (FT) Apr 3, 2020
Recent paper suggests overseas liabilities of EMs are greater than previously thought.

The eurozone's 'whatever it takes' mantra has a problem
Adam Tooze (FT) Apr 3, 2020
EU squabbles are turning that famous defiant phrase into a platitude.

The Coronavirus Pandemic Will Forever Alter the World Order
Henry A. Kissinger (WSJ) Apr 3, 2020
The U.S. must protect its citizens from disease while starting the urgent work of planning for a new epoch.

Infrastructure spending is great. It doesn't solve the current problem.
Matt Bai (WP) Apr 3, 2020
This isn't the 1930s.

Worst case scenario still in play for oil prices
Tim Daiss (AT) Apr 3, 2020
Record market rebound driven by Trump tweet signaling Saudi-Russia production cuts may be short-lived amid Covid-19's demand destruction

Some say there is a trade-off: save lives or save jobs – this is a false dilemma
Kristalina Georgieva and Tedros Adhanom Ghebreyesus (IMF/Telegraph) Apr 3, 2020
At face value there is a trade-off to make: either save lives or save livelihoods. This is a false dilemma – getting the virus under control is, if anything, a prerequisite to saving livelihoods.

The Fed Is Running Out of Bubbles to Create
Klajdi Bregu (Mises Wire) Apr 3, 2020
With each passing recession, the Fed finds it harder to refuel the last bubble, but the market moves on to the new bubble as the Fed keeps interest rates artificially low.

As oil prices plummet, how can resource-rich countries diversify their economies?
Addisu Lashitew, Michael Ross, and Eric Werker (Brookings) Apr 3, 2020
After reaching $70 a barrel in early 2020, oil prices have plummeted to their lowest levels in 20 years at less than $20 a barrel due to the COVID-19 pandemic and the Saudi-Russian oil price war. This price crash once again demonstrates the perils of excessive economic dependence on natural resource revenues. Oil-dependent countries are bracing for a period of fiscal crisis on top of an ongoing economic shock caused by the COVID-19 pandemic. These effects will be severe in countries like Nigeria, Africa's largest oil producer, which collects 57 percent of its government revenues and more than 94 percent of export earnings from petrodollars.

The G20 must step up to confront the global health crisis
Maurice Obstfeld (PIIE) Apr 3, 2020
Microbes do not recognize national borders. For that reason, infectious disease is an example par excellence of a threat requiring intergovernmental cooperation. In a welcome communiqué, G20 leaders have called for greater international collaboration on the public health response to COVID-19. But this commitment lacked the necessary detail to trigger fast concrete actions and provide guidance and reassurance for citizens. Instead, the leaders tasked health minsters to develop "urgent actions" by April 19-20, 2020.

The CARES Act: A Down Payment on Global COVID-19 Response Efforts?
Erin Collinson (CGD) Apr 3, 2020
Funding for international assistance and supporting mobilization of the international financial institutions.

Let's Have Paid Staycations Instead of Unemployment
Narayana Kocherlakota (Bloomberg View) Apr 3, 2020
People have ceased work to save lives. The government should reward them.

Trump's $2 Trillion Idea for Infrastructure Is a Good Start
Noah Smith (Bloomberg View) Apr 3, 2020
Once the pandemic passes, fixing roads and bridges would give the economy the lift it will need.

Bankers Are Sitting on a Vast Mountain of Risky Trades
Elisa Martinuzzi (Bloomberg View) Apr 3, 2020
Everybody's worried about bad loans, but what about the hundreds of billions of dollars of Level 2 and Level 3 assets held by the biggest banks?

Oil Market Is Desperate for Saudi Arabia to Flatten the Curve
Liam Denning (Bloomberg View) Apr 3, 2020
Immediate production cuts are needed to extend the deadline for storage capacity maxing out, but that only buys time.

In the Informal Economy, There's No Shelter From the Virus
Adam Minter (Bloomberg View) Apr 3, 2020
Some of the world's most vulnerable workers are also the hardest to help in a crisis.

Is This China's Global Leadership Moment?
Keyu Jin (Project Syndicate) Apr 3, 2020
A pandemic is no time to tout the superiority of any country's governance system or approach, let alone compete for global dominance. Instead of congratulating itself on having pushed back COVID-19, China should quietly win trust by helping the United States and other countries, not out of strategic interest, but on moral grounds.

The Boredom Pandemic
Raj Persaud (Project Syndicate) Apr 3, 2020
The confinement measures aimed at controlling the spread of COVID-19 could lead to another pandemic with an even higher infection rate: a pathological form of tedium called alysosis. Recent research suggests that it can lead to risky behavior, greater impulsivity, and political extremism.

How COVID-19 Is Transforming Manufacturing
Dalia Marin (Project Syndicate) Apr 3, 2020
As the COVID-19 pandemic escalates, the advanced economies seem to be geared up for a manufacturing renaissance. But while this may reduce risks for large firms, it probably will not benefit very many advanced-economy workers, let alone the developing countries from which production is being shifted.

Witnessing Wuhan
Tracy Wen Liu (Project Syndicate) Apr 3, 2020
China's success in "flattening the curve" of the COVID-19 epidemic has been held up as a model for the rest of the world to emulate. But what the world really needs to understand is that China's "victory" required massive sacrifices by doctors, nurses, and other health workers whose names we will never know.

Responding to COVID-19 in the Developing World
Ahmed Mushfiq Mobarak (Yale Insights) Apr 3, 2020
The mass social distancing strategy being used to mitigate the spread of COVID-19 in the United States and Europe doesn't easily translate to a developing country like Bangladesh, which lacks the capacity to impose restrictions or provide a social safety net for the unemployed. We talked with Yale SOM development economist Mushfiq Mobarak about how he is repurposing his research infrastructure in Bangladesh to gather information and test approaches to spreading public health messages.

Terror and tourism: How bad news can harm economic development
Tim Besley, Thiemo Fetzer, and Hannes Mueller (VoxDev) Apr 3, 2020
The relationship between intensity of reporting on violence and tourist spending suggests that a bad news bias can have serious economic consequences

Trade transportation and the environment
Rikard Forslid (VoxEU) Apr 3, 2020
The transport sector is a significant greenhouse-gas emitter. Because international trade in goods requires transportation, it is regarded with some suspicion by the environmentally concerned. However, trade and transportation may actually decrease emissions if production is 'dirtier' than transportation. This column uses a new 'dirtiness index' to capture how environmentally harmful a firm is and demonstrates how transportation can reduce global emissions if the production of transport services is cleaner than the production it substitutes. The cleaner transportation is relative to other production sectors, the higher the likelihood that transportation could lower emissions.

Try equity: Coronavirus and financial stability
Arnoud Boot, Elena Carletti, Hans-Helmut Kotz, Jan Pieter Krahnen, Loriana Pelizzon, and Marti Subrahmanyam (VoxEU) Apr 3, 2020
COVID-19 is a disaster for many firms – especially small and medium-sized ones. This column proposes a scheme that could bring funding to firms quickly without increasing their leverage or default risk. The plan combines outright cash transfers with a temporary, elevated corporate profit tax at the firm level as a form of conditional payback. The implied equity-like payment structure has positive risk-sharing features for firms, without impinging on ownership structures. The proposal should be implemented at the European level to strengthen euro area resilience.

COVID-19 crisis, the dollar, and capital flows
Giancarlo Corsetti and Emile Marin (VoxEU) Apr 3, 2020
In crises, the dollar tends to appreciate – especially against emerging market currencies – and dollar liquidity becomes scarce. This column shows that today's events are following the historical pattern. Forex market turmoil is preceded by an inversion of the US yield curve as investors, anticipating tough times ahead, require relatively high short-term yields and an appreciation of relatively risky currencies until the disaster occurs. Then, the dollar appreciates sharply. Then, emerging markets suffer massive capital flight. What's new about the COVID-19 crisis is its scale and speed.

The asset markets and the coronavirus pandemic
Kam Chan and Terry Marsh (VoxEU) Apr 3, 2020
The lockdowns in place around the world will result in substantial economic collateral damage. This column looks at stock market reactions prior to and after six prominent historical crises. Equity market prices like the Dow Index are negatively impacted by increases in uncertainty. The business ramifications of regulatory policies, subsidies and so on put in place to contain the spread of COVID-19 posing the greatest uncertainty in the current crisis.

A progressive European wealth tax to fund the European COVID response
Camille Landais, Emmanuel Saez, and Gabriel Zucman (VoxEU) Apr 3, 2020
European governments have reacted swiftly to the COVID crisis and are now discussing ways to mutualise the cost of the epidemic. This column proposes the creation of a progressive, time-limited, European-wide progressive wealth tax assessed on the net worth of the top 1% richest individuals. If fighting COVID-19 requires issuing 10 points of EU GDP in Eurobonds (or a rescue fund worth 10 points of EU GDP), a progressive wealth tax would be enough to repay all this extra debt after ten years.

Are the Markets Underestimating the Coronavirus Depression?
Michael Hirsh (FP) Apr 3, 2020
As we saw during the last financial crisis, the "smart" players aren't always so smart. One thing we know: The world economy will never be the same.

The Pandemic Is Transforming Politics and Economics
John Cassidy (New Yorker) Apr 3, 2020
Just like in wartime, people are frightened, public attitudes are changing, and the circumstances are necessitating a big expansion of the government's role.

Virus lays bare the frailty of the social contract
FT View Apr 4, 2020
Radical reforms are required to forge a society that will work for all.

Governments are once again splurging to keep big companies afloat
Economist Apr 4, 2020
Authorities ponder which companies to bail out—and how.

The departing boss of Norway's oil fund on building an asset manager
Economist Apr 4, 2020
Norges Bank Investment Management is the world's single largest owner of equities.

Will inflation make a comeback after the crisis ends?
David Miles and Andrew Scott (VoxEU) Apr 4, 2020
Might inflation rise as a result of policies undertaken during the current crisis and as demand comes back more strongly than supply when it ends? This column argues that it is possible, but far from clear. Indeed, there are reasons to doubt whether any rise in inflation will come. Looking back at past crises – and in particular wars – reveals some similarities but more differences with the current pandemic. There was more reason to see UK inflation rise after the three major wars of the past 220 years; and even then, the evidence that it did is not conclusive.

Responses of consumption and prices in Japan to the COVID-19 crisis and the Tohoku earthquake
Tsutomu Watanabe (VoxEU) Apr 4, 2020
It has only been a month since the coronavirus shock emerged in Japan and its full nature is still unclear. This column compares the responses of consumption and prices to the COVID-19 shock and another large-scale natural disaster that hit Japan, the Tohoku earthquake in March 2011. The responses of supermarket sales and prices at a daily frequency during the two crises are quite similar. However, evidence suggests that whereas people expected higher inflation for goods and services in the wake of the earthquake, they expect lower inflation in response to the coronavirus shock, suggesting that the economic deterioration due to COVID-19 should be viewed as driven mainly by an adverse aggregate demand shock to face-to-face service industries such as hotels and leisure, transportation, and retail, rather than as driven by an aggregate supply shock.

The normality of extraordinary monetary reactions to huge real shocks
Stefano Ugolini (VoxEU) Apr 4, 2020
The bold reactions by central banks to the COVID-19 crisis have been called 'unprecedented'. But the global economy has experienced real shocks before, with monetary authorities implementing similarly assertive policies. This column reviews three relevant historical precedents. In each case, intervention targeted the private rather than public sector, and succeeded in preventing an economic collapse. The larger difficulty lay in finding the right 'exit strategy' once the shock had passed.

A legal perspective on ESM loans and Coronabonds
Julian Pröbstl (VoxEU) Apr 4, 2020
The massive fiscal packages being deployed in Europe raise issues of financing. Economists have proposed three main models. This column offers a pragmatic legal perspective on the options, focusing on their compatibility with EU Law, the ESM Treaty, and German Constitutional Law. It argues that, from a practical legal standpoint, the use of the ESM is preferable to issuing Coronabonds, because it offers more legal certainty and could be implemented more quickly. However, jointly issuing Coronabonds would send the stronger political signal.

How Saudi Arabia Can Save the Global Oil Industry
Julian Lee (Bloomberg View) Apr 5, 2020
It's time for a crystal clear take-it-or-leave-it ultimatum. If that doesn't work, oil prices will drop to single digits.

Investors Need to Be Selective in Following the Fed
Mohamed A. El-Erian (Bloomberg View) Apr 5, 2020
The central bank can calm liquidity issues, but its market intervention most likely won't extend to the most risky assets.

Why the oil price shock is nothing to celebrate
FT View Apr 5, 2020
Lower revenues exacerbate the damage for poorer producer nations.

The EU must be forged in this crisis or it will die
Luigi Zingales (FT) Apr 5, 2020
It is currently little more than a geographic expression with a common central bank.

We may not all be equal in the eyes of coronavirus
Angus Deaton (FT) Apr 5, 2020
Historically, plagues make societies more equal but this pandemic may be an exception.

Do not count on a fast global economy bounceback
Gavyn Davies (FT) Apr 5, 2020
A very sudden stop has happened but that does not mean a sudden start will follow.

BoE is not doing 'monetary financing'
Andrew Bailey (FT) Apr 5, 2020
We will protect independence of inflation targeting.

The Economy Will Survive the Coronavirus
Vernon L. Smith (WSJ) Apr 5, 2020
Don't despair. Even amid the doom and gloom there are many things to be glad about.

Let's avoid another Great Depression
E.J. Dionne (WP) Apr 5, 2020
$2.2 trillion in relief is a huge number. It's also not nearly enough, not nearly fast enough.

Here comes the great deflation threat
Robert Samuelson (WP) Apr 5, 2020
A modest amount of change could aid an economic recovery by making goods and services cheaper.

COVID-19 economic crisis: Europe needs more than one instrument
Agnès Bénassy-Quéré, Giancarlo Corsetti, Antonio Fatás, Gabriel Felbermayr, Marcel Fratzscher, Clemens Fuest, Francesco Giavazzi, Ramon Marimon, Philippe Martin, Jean Pisani-Ferry, Lucrezia Reichlin, Hélène Rey, Moritz Schularick, Jens Südekum, Pedro Teles, Nicolas Véron, and Beatrice Weder di Mauro (VoxEU) Apr 5, 2020
There are now several proposals for complementing the vigorous decision of the ECB to launch a mega 'pandemic emergency purchase programme' with fiscal and financial initiatives at the European level. These proposals sometimes overlap, which is a good sign of convergence. This column argues that they are also largely complementary to one another. Hence, it calls for a multi-instrument approach that would jointly achieve three objectives: sharing the cost of the COVID crisis, helping member states to borrow at very long maturities and low interest rates, and relaunching the EU after the crisis. In addition to existing tools, the authors believe that a tryptic built around a COVID fund (with borrowing capacity), specific credit guarantees with the European Investment Bank and dedicated credit lines such as an ESM COVID line or the recently proposed temporary Support to mitigate Unemployment Risks in an Emergency (SURE) would be appropriate, provided it is sized up and allows for very long-run borrowing.

COVID-19: OMT is second-best, but still welc
Lorenzo Codogno and Paul van den Noord (VoxEU) Apr 5, 2020
The emergency measures in place to absorb the COVID-19 shock need to be supplemented by OMT unless leaders agree to create a euro area safe asset and fiscal capacity. This column employs an empirically calibrated model to show that OMT is second-best to the creation of a safe asset and fiscal capacity at the centre, but would still be a powerful means to mitigate the economic impact of the crisis.

A Pandemic Solidarity Instrument for the EU
Sebastian Grund, Lucas Guttenberg, and Christian Odendahl (VoxEU) Apr 5, 2020
To ensure that all EU countries can do what is necessary to fight the economic fallout of the pandemic, the fiscal costs of this crisis must be shared. This column proposes that the EU give member states €440 billion in grants to support health care, liquidity to the private sector, short-time work schemes and stimulus packages. The EU should raise the funds in bond markets backed by guarantees.

Corona transfers instead of Coronabonds
Daniel Gros (VoxEU) Apr 5, 2020
The countries hit hardest by the COVID-19 crisis already have too much debt. Lending from the European Stability Mechanism or via Coronabonds would add to that debt, potentially making it unsustainable. This column suggests that European solidarity should take the form of transfers, not credit. A substantial transfer could be organised via the EU budget simply by exempting the weakest countries from their contributions to the EU budget for the duration of the programming period 2012-2027.

From shutdowns to the reopening of economies
FT View Apr 6, 2020
Lockdowns are necessary measures but must be temporary.

The liquidity 'collapse' is a modern-day cobra effect
Robin Wigglesworth (FT) Apr 6, 2020
Crash in trading conditions reflects shift of risks from banks into financial markets.

The big banks have a giant role to play in this crisis
Anneka Treon (FT) Apr 6, 2020
Governments are leaning on the balance sheets of banks, rather than the other way around.

Emerging economies set to struggle to meet debt obligations
Steve Johnson (FT) Apr 6, 2020
Plunging currencies and foreign revenues leave countries scrambling to avoid default.

Eurobonds are not the answer
Gideon Rachman (FT) Apr 6, 2020
Why the Germans and Dutch are right to resist this way of sharing coronavirus costs.

Coronavirus: Is Europe losing Italy?
Miles Johnson, Sam Fleming, and Guy Chazan (FT) Apr 6, 2020
Furious at their plight being ignored and over resistance to coronabonds, Italians' sense of betrayal deepens.

European Banks Prepared for a Crisis. But Not This One.
Jack Ewing (NYT) Apr 6, 2020
The financial impact of the coronavirus surpasses the old worst-case scenarios, threatening a credit crunch or even a new financial crisis.

The Fed's New Mission to Save the Economy
Gary Cohn and Glenn Hutchins (WSJ) Apr 6, 2020
The central bank's lending programs will need top-shelf staff and rigorous disclosure.

Beating the Coronavirus Is the Best Stimulus
Roman Frydman and Edmund S. Phelps (WSJ) Apr 6, 2020
Directing businesses to fight the pandemic would help workers more than an infrastructure splurge.

A European approach to fund the coronavirus cost is in the interest of all
Agnès Bénassy-Quéré, Arnoud Boot, Elena Carletti, Jan Krahnen, Miguel Otero-Iglesias, Lucrezia Reichlin, Dirk Schoenmaker and Guntram B. Wolff (Bruegel) Apr 6, 2020
We had not seen a common challenge as clear as this pandemic. The sum of national actions and programs is likely to be insufficient.

It is decision time for EU leaders—what should fiscal response to pandemic be?
Jacob Funk Kirkegaard (PIIE) Apr 6, 2020
European leaders have been unable to agree to a joint fiscal policy response to the economic crisis created by the COVID-19 virus, a striking failure in light of the European Central Bank's (ECB) forceful actions. Decision time is approaching for the Eurogroup and EU Council, the representative groups that are the EU's top decision-making bodies. EU governments have put several concrete proposals on the table (see below), as well as have outside economists.

Flatten the Curve without Flattening the Economy: How to Stop COVID-19 from Causing Another Catastrophe for Health in Low- and Middle-Income Countries
Lorcan Clarke, Kalipso Chalkidou and Francis Ruiz (CGD) Apr 6, 2020
Dozens of low- and middle-countries (LMICs) have now implemented stringent policies to slow the spread of COVID-19 in communities, including closing schools, workplaces, and enforcing physical distancing. These policies accompanied by population-level testing–where possible–can help flatten the epidemic curve. Flattening the curve reduces the pressure on health systems during the wait for effective treatments for COVID-19 to become available.

An Early View of the Economic Impact of the Pandemic in 5 Charts
John Bluedorn, Gita Gopinath, and Damiano Sandri (IMF) Apr 6, 2020
The COVID-19 pandemic has pushed the world into a recession. For 2020 it will be worse than the global financial crisis. The economic damage is mounting across all countries, tracking the sharp rise in new infections and containment measures put in place by governments.

Europe must act now to prepare the aftermath of the pandemic crisis
Laurence Boone (OECD Ecoscope) Apr 6, 2020
We are currently facing extraordinary challenges posed by the Covid-19 pandemic, due to which necessary health measures are shutting down part of our economies and precipitating a recession of unprecedented nature and magnitude.

Welcome to the Table, Mr. Abe. Japan's Been Waiting
Daniel Moss (Bloomberg View) Apr 6, 2020
The coronavirus is a test of leadership for the prime minister. His fiscal package may look bold, but action is late.

Who's to Blame for Fallen Angels and Sinking Demons?
Shuli Ren (Bloomberg View) Apr 6, 2020
If you're worried about companies losing their investment-grade status, consider those getting cut within the depths of junk.

Today's Fracking Bust Puts 2015 to Shame
Liam Denning (Bloomberg View) Apr 6, 2020
Eighteen months into a down-cycle, the gentle slope has morphed into a cliff.

Three Things Will Determine If There's an Economic Depression
Tim Duy (Bloomberg View) Apr 6, 2020
Depth, duration and deflation will determine whether the economy bounces back quickly or stays in a prolonged downturn.

Fed Needs to Throw a Lifeline to Junk Bonds
Noah Smith (Bloomberg View) Apr 6, 2020
It's a bailout of companies that took too much risk, as well as the banking system. But so what?

Health Can Be a Way Out of the Middle-Income Trap
Andy Mukherjee (Bloomberg View) Apr 6, 2020
The slowing of trade has left India in need of a new economic model once the coronavirus pandemic is over.

India Besieged
Shashi Tharoor (Project Syndicate) Apr 6, 2020
Though Indians have rallied in solidarity to combat the coronavirus pandemic, reasonable questions about the country's lack of preparedness are being posed. But the answers will have to wait until the overriding challenge – avoiding millions of COVID-19 victims – has passed.

Navigating the Pandemic Trilemma
Harold James (Project Syndicate) Apr 6, 2020
The broad consensus of the COVID-19 era holds that measures to protect public health imply hard trade-offs with economic growth and political liberty. In fact, there are plenty of ways to adapt political and economic imperatives to policies needed to combat the pandemic.

Will COVID-19 Remake the World?
Dani Rodrik (Project Syndicate) Apr 6, 2020
No one should expect the pandemic to alter – much less reverse – tendencies that were evident before the crisis. Neoliberalism will continue its slow death, populist autocrats will become even more authoritarian, and the left will continue to struggle to devise a program that appeals to a majority of voters.

Internationalizing the Crisis
Joseph E. Stiglitz (Project Syndicate) Apr 6, 2020
The public-health effects and economic impact of the COVID-19 pandemic in developing and emerging economies are only just becoming apparent, but it is already clear that the toll will be devastating. If the international community wants to avoid a wave of defaults, it must start developing a rescue plan immediately.

A Letter to G20 Governments
Erik Berglöf, Gordon Brown, and Jeremy Farrar (Project Syndicate) Apr 6, 2020
In 2008-2010, the Great Recession could be surmounted when the economic fault line – under-capitalization of the global banking system – was tackled. Now, however, the economic emergency will not be resolved until the health emergency is effectively addressed, and that requires coordinated global leadership – now.

The Case for Mandatory Face Masks
Shang-Jin Wei (Project Syndicate) Apr 6, 2020
Now that the US Centers for Disease Control is recommending that the public use face masks to prevent the spread of COVID-19, it is worth examining the main arguments against such self-protection. Upon closer inspection, they all fall short.

To fight the COVID pandemic, policymakers must move fast and break taboos
Sony Kapoor and Willem Buiter (VoxEU) Apr 6, 2020
COVID-19's economic impact on crumbling GDPs, collapsing tax revenues and ballooning fiscal deficits will be much larger than what has been reported thus far. Any hesitation in throwing everything but the kitchen sink at the health, employment, state aid and financial rescue interventions that are needed will literally kill citizens and destroy the economy. To combat COVID-19, central banks, including the ECB, must cross the Rubicon of monetary financing and immediately transfer the 20%-30% of GDP this will cost into fiscal coffers.

Prepare for large wage cuts if you are younger and work in a small firm
Brian Bell, Nicholas Bloom, Jack Blundell, and Luigi Pistaferri (VoxEU) Apr 6, 2020
The COVID-19 pandemic is turning into a global recession – probably the biggest drop in economic activity since the Great Depression of the 1930s. This column uses over 3 million earnings observations drawn from more than 400,000 UK workers between 1975 and 2016 to identify groups of workers who are most exposed to aggregate risk. This findings suggest that young male workers at small firms could see earnings losses of 8% to 9%, with older women at large firms seeing little or no change in their earnings.

The ESM can finance the COVID fight now
Aitor Erce, Antonio Garcia Pascual, and Ramon Marimon (VoxEU) Apr 6, 2020
Member states are currently debating how to finance the fight against COVID-19. As time is pressing, practical and readily implementable solutions are needed now. Using the ESM to provide the funds needed is a reasonable and workable way forward. Italy, Spain and other states would benefit from using the ESM access to AAA funding to reinforce their debt dynamics: a combination of loan size, maturity and interest rates would strengthen debt sustainability. This column shows the stabilisation power of an ESM-ECB intervention, using existing instruments and the just announced ESM Rapid Financing Instrument, showing the case of Italy as an example. Combing ECB support with ESM funds would deliver a more resilient euro area, better placed to engage in a post-virus economic recovery. The announced EIB guarantees and the SURE unemployment re-insurance will also help countries. However, these measures are not a supplement, but a complement, to the already feasible ESM financing discussed.

The Coronavirus Will Cause New Crises in Latin America
Michael Albertus (FP) Apr 6, 2020
The region's economic and political systems were already under strain. In 2020, the virus may push them to a breaking point.

The Coronavirus Is Accelerating History Past the Breaking Point
Kyle Harper (FP) Apr 6, 2020
It's not just science and economic models that offer answers for the current moment. History can also teach us about the causes of the pandemic—and its possible consequences.

Trump's Promised Oil Deal Still Eludes Big Producers as Prices Dive Again
Keith Johnson and Reid Standish (FP) Apr 6, 2020
But Saudi Arabia and Russia appear to be thinking twice about their oil war as their economies start to feel the pain.

Get Ready for SOFR: What's Up With LIBOR?
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Apr 6, 2020
LIBOR and the Secured Overnight Financing Rate (SOFR), which generally are highly correlated, have diverged significantly of late. Although SOFR fell sharply when the FOMC slashed its target for the fed funds rate, LIBOR has generally moved higher. What is going on?

The Animal Spirits Index Drops into Negative Territory
Azhar Iqbal (WF) Apr 6, 2020
Our Animal Spirits Index dropped to -0.33 in March, the first negative print since June 2016. The struggle to respond effectively to the ongoing crisis is apparent in the policy uncertainty index, which hit a record high.

News Sentiment in the Time of COVID-19
Shelby R. Buckman, Adam Hale Shapiro, Moritz Sudhof, and Daniel J. Wilson (FRBSF Econ Letter) Apr 6, 2020
The COVID-19 pandemic is causing severe disruptions to daily life and economic activity. Reliable assessments of the economic fallout in this rapidly evolving situation require timely data. Existing sentiment indexes are useful indicators of current and future spending but are only available with a lag or have a short history. A new Daily News Sentiment Index provides a way to measure sentiment in real time from 1980 to today. Compared with survey-based measures of consumer sentiment, this index shows an earlier and more pronounced drop in sentiment in recent weeks.

Printing money is valid response to coronavirus crisis
FT View Apr 7, 2020
Quantitative easing programmes may be here for the long term.

The EU's shared purpose requires shared financing
Ana Botin (FT) Apr 7, 2020
We need a new funding scheme, based on the idea that we are all in this together.

We need some 'creative destruction' now
John Thornhill (FT) Apr 7, 2020
Covid-19, tech revolution and the environmental threat may spark a wave of innovation.

Markets still too sanguine about coronavirus threat
Matthew Harrison (FT) Apr 7, 2020
Path to reopening US economy will be long and marred by stops and starts.

'It Changed So Fast': Oil Is Making Guyana Wealthy but Intensifying Tensions
Anatoly Kurmanaev (NYT) Apr 7, 2020
In what was once one of South America's poorest countries, a fraught transformation is underway, as oil riches bring optimism but also intensify ethnic tensions and environmental concerns.

The World Is Watching How America Handles Coronavirus
Robert B. Zoellick (WSJ) Apr 7, 2020
The Trump administration has failed to convey an impression of strong international leadership.

So long, balanced budgets. Everyone's into endless spending now.
David Von Drehle (WP) Apr 7, 2020
Modern monetary theory is crisis economics. And we're in a crisis.

How COVID 19 Hits Bad Governments
Alexei Bayer (Globalist) Apr 7, 2020
COVID 19 is especially dangerous for people with pre-existing conditions. It also strikes countries with pre-existing bad governments with particular severity.

The G20 should expand trade to help developing countries overcome COVID-19
Anabel González (PIIE) Apr 7, 2020
For developing countries, especially the poorest among them, trade—both imports and exports—is a powerful, cost-effective tool to mitigate the potentially devastating effects of COVID-19. G20 countries should, therefore, quickly implement trade policies that can protect lives across the world by improving access to affordable medical supplies. Policies that put this access at risk should be restrained. Global cooperation is critical to meeting this challenge.

Debt standstills can help vulnerable governments manage the COVID-19 crisis
Anna Gelpern, Sean Hagan, and Adnan Mazarei (PIIE) Apr 7, 2020
COVID-19 is devastating low- and middle-income countries, adding to their debt burdens and threatening a far-reaching sovereign debt crisis. To help manage debt distress for the countries most exposed, the G20 should call for a temporary standstill on sovereign debt payments to official and private creditors. A standstill entails an agreement among creditors and the debtor for a temporary pause on debt payments. In some cases, contracts allow a majority of creditors to agree to a standstill over the objections of the minority. In addition, the G-20 should call for the establishment of a central coordination mechanism to assist in both implementing a standstill and developing a longer-term sovereign debt strategy to meet the pandemic challenge. It should make use of recent contractual and institutional reforms to maximize creditor participation in this effort.

A Reckoning for China's Opaque Overseas Lending
Scott Morris (CGD) Apr 7, 2020
Imagine that a significant body of academic research in the United States was devoted to figuring out how much the federal government spent and where. This academic sleuthing might comb local newspapers in Peoria and Palm Beach for announcements about projects supported by the federal Department of Education or Federal Highway Administration. It might also rely on state governments, some of whom would be committed to transparent reporting of all funds they receive from the federal government. From these piecemeal sources, academics would stitch together something that seeks to be a comprehensive picture of the federal budget.

Key Takeaways From PIMCO's Cyclical Outlook: From Hurting to Healing
Joachim Fels (PIMCO) Apr 7, 2020
We expect the global economy and financial markets to transition from intense near-term pain to gradual healing over the next six to 12 months. However, there is the risk if not the likelihood of an uneven recovery, with significant setbacks along the way and some permanent damage.

Coronavirus lessons from New York and San Francisco
Indermit Gill (Brookings) Apr 7, 2020
Since the first novel coronavirus case in the United States was registered on January 19, 2020, we have learned one thing about the discipline of public health: It has been masquerading as medicine but it is at best a social science, and not an especially sophisticated one. Public health experts in the U.S. and the World Health Organization (WHO) have even made economists sound coherent and consistent.

Banks Need to Put Dividends on Hold
Narayana Kocherlakota (Bloomberg View) Apr 7, 2020
The Fed shouldn't allow them to deplete their loss-absorbing capital.

Europe's Debate Over Coronabonds Can Wait
Clive Crook (Bloomberg View) Apr 7, 2020
Having this argument now will only delay the necessary fiscal response.

This Stock Market Swoon Differs From All Others
Aaron Brown (Bloomberg View) Apr 7, 2020
Understanding why equities fell so far, so fast is the key to understanding the way forward.

Putin's Oil Price Gambit Has Run Out of Road
Clara Ferreira Marques (Bloomberg View) Apr 7, 2020
Russia was happy to take the pain of lower oil prices in its fight with U.S. shale producers. But that was before Covid-19 changed the game.

Emerging Markets Are Peering Over the Precipice
Marcus Ashworth (Bloomberg View) Apr 7, 2020
The last thing we need is an emerging markets crisis, yet all the conditions are there: collapsing oil prices, an economic shock, over-indebtedness and fragile currencies.

Oil Markets Provide a Glimpse of the Post-Pandemic Future
Meghan L. O'Sullivan (Bloomberg View) Apr 7, 2020
If OPEC dies this week, there are three likely paths ahead, and two are bad.

COVID-19 Will Not Reduce Global Reliance on China
Zhang Jun (Project Syndicate) Apr 7, 2020
At a time when some might be tempted to turn inward, China remains as committed as ever to globalization. The trade, investment, and growth opportunities that this commitment generates could well be a godsend for struggling countries in the aftermath of the COVID-19 crisis.

Will COVID-19 Derail the African Century?
Michael Wilkerson (Project Syndicate) Apr 7, 2020
Africa's high urban population densities, high numbers of day workers, and weak medical systems would seem to make it highly vulnerable to COVID-19. But Africa could emerge from the pandemic with less lasting damage than many fear.

Can Latin America Afford to Fight COVID-19?
Alejandro Izquierdo and Martin Ardanaz (Project Syndicate) Apr 7, 2020
Owing to the missed opportunities of the post-2008 period, most Latin American and Caribbean governments have very limited fiscal space with which to manage the COVID-19 pandemic. Nonetheless, if their limited ammunition is well-aimed, it could go a long way toward mitigating the crisis.

The Private Sector Steps Up
Dambisa Moyo (Project Syndicate) Apr 7, 2020
Many companies emerged from the global crisis a decade ago with their reputations in tatters. But if private firms maintain the foresight, adaptability, and compassion that many have shown in recent weeks, they will emerge from this crisis having established their true value to the economies and communities they serve.

Now or Never for Global Leadership on COVID-19
Gordon Brown, Erik Berglöf, and Jeremy Farrar (Project Syndicate) Apr 7, 2020
During the global financial crisis of 2008, G20 leaders coordinated a global response, and in other emergencies – such as tsunamis, civil wars, or epidemics – coalitions of countries have convened donor conferences to generate the necessary resources. Today, we need both.

Mapping the COVID-19 Recession
Kenneth Rogoff (Project Syndicate) Apr 7, 2020
Until there is a better sense of when and how the COVID-19 public-health crisis will be resolved, economists cannot even begin to predict the end of the recession that is now underway. Still, there is every reason to anticipate that this downturn will be far deeper and longer than that of 2008.

The Greater Trade Collapse of 2020
Richard Baldwin (VoxEU) Apr 7, 2020
World trade experienced a sudden, severe, and synchronised collapse in 2008 – the steepest drop in recorded history, and the deepest fall since the Great Depression. This column argues that 2020 will show a trade collapse that is far larger since the 'COVID concussion' is both a demand shock and a supply shock while the 2008-09 collapse was driven mostly by a demand shock. Key learnings from the last Great Trade Collapse are highlighted.

The economic, political and moral case for a European fiscal policy response to COVID-19
Thorsten Beck (VoxEU) Apr 7, 2020
There has been a lot of discussion in recent weeks on whether an EU-wide fiscal policy response to COVID-19 should include common liability for the additional debt that such a response would imply. This column lays out the arguments in favour of such an approach – arguments that go beyond economic ones.

Letter to governments of the G20 nations
Erik Berglöf, Gordon Brown, and Jeremy Farrar (VoxEU) Apr 7, 2020
The gravity and urgency of the entwined COVID-19 public health and economic crises must be reflected in an unprecedented response. In this letter world leaders, leading global health experts and economists outline what is needed. The two crises require urgent specific measures that can be agreed on with speed and at scale. Both require world leaders to commit to funding far beyond the current capacity of our existing international institutions. The economic emergency will not be resolved until the health emergency is effectively addressed: the health emergency will not end simply by conquering the disease in one country alone, but by ensuring recovery from COVID-19 in all countries.

Plumbing ideas for crisis abatement
Erica Bosio and Simeon Djankov (VoxEU) Apr 7, 2020
European governments are searching for ways to abate the sudden economic shock from the coronavirus pandemic. This column proposes four ideas on lessening the negative effects of the sudden economic shock on private businesses. (1) Governments may defer or waive the collection of corporate and value-added taxes to enhance liquidity. (2) Credit bureaus and registries give governments data on which businesses to target with lines of credit or other financial assistance. (3) Governments can use the procurement system to prioritise publicly funded projects. (4) Businesses should be kept as going concerns through temporary suspension of certain bankruptcy procedures.

The Pandemic Will Accelerate History Rather Than Reshape It
Richard Haass (FA) Apr 7, 2020
Not every crisis is a turning point.

The Belt and Road After COVID-19
Plamen Tonchev (Diplomat)/I> Apr 7, 2020
Possible post-pandemic scenarios for China's long-term foreign policy strategy.

Amid Price War, Texas Oil Patch Is Coming Up Empty
Jacob Wallace (FP) Apr 7, 2020
Thousands of workers wonder if the coronavirus shutdown will be the worst oil bust of all.

Why China's state oil company merger looks like an unusual step
Tom Mitchell (FT) Apr 8, 2020
CNPC, Sinopec and Cnooc are being forced to hand over the valuable pipelines that form the backbone of their respective monopolies.

Supply chains need love during the pandemic
Brooke Masters (FT) Apr 8, 2020
Companies should pull out the stops to support critical suppliers now and prepare to resume production.

Defining productivity in a pandemic is revealing
Diane Coyle (FT) Apr 8, 2020
How should we measure the contribution of a teacher or a health worker during this crisis?

The coronavirus crisis will change the world of commerce
Economist Apr 8, 2020
Firms that make it through will face a new business climate.

How to reopen factories after covid-19
Economist Apr 8, 2020
Handgel and nanotechnology.

An unprecedented plunge in oil demand will turn the industry upside down
Economist Apr 8, 2020
Many producers will not survive the pandemic's aftershock.

To Boost Liquidity, Expand the Definition of Collateral
Michael Klowden and Michael Piwowar (WSJ) Apr 11, 2020
Expand one of the government's most successful Great Recession-era lending mechanisms to include more assets.

We're Already in a Global Recession, but Expect a Robust Recovery
Roger Aliaga-Díaz (Brink) Apr 8, 2020
The world entered a recession in March due to the coronavirus outbreak. The global economic impact of the coronavirus with a deep dive into the vulnerabilities and responses across the world, with a focus on the U.S., China, Brexit, the eurozone and Latin America.

How are International Development Agencies Responding to the COVID-19 Crisis?
Mikaela Gavas, Rachael Calleja and Andrew Rogerson (CGD) Apr 8, 2020
The scale of the challenge in developing countries is unprecedented.

How To Optimize Africa's Economic Response to the Coronavirus Pandemic
Daouda Sembene (CGD) Apr 8, 2020
As part of their efforts to contain the economic, social, and political fallout from the COVID-19 crisis, many African countries have announced large fiscal stimulus packages. But planned fiscal responses will need to be crafted with caution to be most effective.

IFC Moves Towards Competitive Capped and Transparent Subsidy Use
Charles Kenny (CGD) Apr 8, 2020
On March 20, as part of the negotiations between the IFC and the US government over a (now agreed) capital increase for the IFC, World Bank Group president David Malpass issued a letter to US Treasury Secretary Steve Mnuchin promising changes in the way IFC does business. There is a lot to like in that letter–not least around the IFC Compliance Ombudsman, and the commitment to commission an independent, external review of the problematic "total tax and contribution rate" sub-component of the Paying Taxes Indicator of the Doing Business report.

Calling All Official Bilateral Creditors to Poor Countries: Switch to IDA Concessional Terms as Part of COVID-19 Response
Nancy Lee, Scott Morris, Alysha Gardner and Asad Sami (CGD) Apr 8, 2020
On March 25, the heads of the International Monetary Fund and the World Bank Group called on G20 leaders to pursue debt relief with respect to their official bilateral credits to IDA countries (poor countries eligible for concessional World Bank finance through the bank's "International Development Association"). The two international financial institutions offered to assess the impact of the crisis on each IDA country and to prepare a proposal for how official bilateral creditors could address both the financing and debt relief needs of those countries. On their side, on March 26, the G20 leaders called on these same two institutions to use "all of their instruments to their fullest extent as part of a coordinated global response." They pledged to "continue to address risks of debt vulnerabilities in low-income countries due to the pandemic."

Designing the fiscal response to the COVID-19 pandemic
Olivier Blanchard (PIIE) Apr 9, 2020
The fiscal policy response to the pandemic has been unprecedented. Urgent measures are being taken, which are likely to lead very large fiscal deficits. The response will have to be refined and adjusted over time, as a function of both the pandemic dynamics and our improving understanding of the issues.

The G20 should do more to harness the IMF and World Bank
Simeon Djankov and Anne-Laure Kiechel (PIIE) Apr 8, 2020
The World Bank and the International Monetary Fund (IMF) have performed impressively in confronting a global pandemic undreamed of when these two institutions were established at Bretton Woods 75 years ago. But the G20 leaders now have an obligation to harness them still further to deal with the health and economic fallout of the COVID-19 crisis.

The U.S. Likely Faces a Deep, Hopefully Short Recession
Tiffany Wilding (PIMCO) Apr 8, 2020
The U.S. labor market disruption is the worst the country has experienced in recent memory, suggesting that the decline in overall activity could also be much more severe.

Brazil and Argentina — Polar Opposites on the Coronavirus, with Far-Reaching Consequences
Sylvia Colombo (Brink) Apr 8, 2020
Brazilian President Jair Bolsonaro and Argentinian President Alberto Fernández were locked in a bitter rivalry before coronavirus. And the pandemic has only accentuated the divide, with the two leaders taking polar opposite approaches to the virus.

Disease, like poverty, does not stay at home
Yonas Adeto, Karim El Aynaoui, Thomas Gomart, Paolo Magri, Greg Mills, Karin von Hippel and Guntram B. Wolff (Bruegel) Apr 8, 2020
To fight the Covid-19 pandemic, best practice responses in Africa need to be implemented around international collaboration. These include the need to activate emergency operations centres, to establish a surge capacity in health systems, and to mitigate the economic and social consequences of the pandemic.

India Can't Count on Banks to Lead Virus Recovery
Mihir Sharma (Bloomberg View) Apr 8, 2020
The nationwide lockdown will hit the sector in its healthiest spot.

Don't Let This Billion Dollar Bailout Fool You
Anjani Trivedi (Bloomberg View) Apr 8, 2020
China's stimulus for its ailing auto industry only creates new problems.

How Would You Decide to Restart the Economy?
Mohamed A. El-Erian (Bloomberg View) Apr 8, 2020
The experts weigh in on the risks and trade-offs. Now it's your call.

How to Stop the Italians and the Dutch From Fighting
Ferdinando Giugliano (Bloomberg View) Apr 8, 2020
A compromise is possible — involving very limited conditions on rescue loans and no euro bonds, but a commitment to some form of mutualized debt.

A Saudi-U.S.-Russia Oil Deal Is Not a Good Idea
Christof Ruehl (Bloomberg View) Apr 8, 2020
In the throes of the coronavirus pandemic, the world needs cheap oil and competition. Joined-up interventions to prop up the price are a bad way to go.

A Pandemic Is No Time for an Infrastructure Bill
Ramesh Ponnuru (Bloomberg View) Apr 8, 2020
An idea with bipartisan support never goes anywhere and wouldn't help anyway.

Trump Is Right to Block IMF Aid for Iran
Bobby Ghosh (Bloomberg View) Apr 8, 2020
There are less risky and more transparent ways to help Iranians suffering from the coronavirus.

Covid-19 Is Trapping Ecuador Between Death and Debt
Mac Margolis (Bloomberg View) Apr 8, 2020
Latin America's worst-hit virus victim also faces a deepening economic hole.

Vietnam's Low-Cost COVID-19 Strategy
Hong Kong Nguyen (Project Syndicate) Apr 8, 2020
Tightened border controls, agile health departments, tech platforms, and a hand-washing song that went viral have added up to a frugal but highly effective response to the threat of COVID-19. The country's success provides a model that other developing an emerging economies should follow.

Africa's COVID-19 Budget Crunch
Biniam Bedasso and Neil Cole (Project Syndicate) Apr 8, 2020
The coronavirus will challenge African economies already saddled with debt, shrinking budget revenue, and compromised health systems. A continent-wide approach that applies lessons learned in Liberia during the Ebola outbreak and elsewhere during the current pandemic will be needed to prevent fiscal ruin.

Cryptocurrencies' Time to Shine?
Brian Armstrong (Project Syndicate) Apr 8, 2020
Now that the COVID-19 pandemic has accelerated the trend toward e-commerce, policymakers and the general public should apprise themselves of the latest developments in cryptocurrencies. And just as e-commerce requires encryption to protect personal privacy, so do digital coins.

Mobilizing Development Banks to Fight COVID-19
Stephany Griffith-Jones, Régis Marodon, and José Antonio Ocampo (Project Syndicate) Apr 8, 2020
Both developed and developing countries urgently need large-scale funding to help maintain economic activity and jobs during the current pandemic. Fortunately, more than 400 development banks around the world can play a vital role in minimizing economic decline, supporting recovery, and financing structural transformation.

Lessons from Crises Past
George P. Shultz, Michael J. Boskin, and John B. Taylor (Project Syndicate) Apr 8, 2020
Government policies restricting the operation of markets usually do more harm than good. Even in times of crisis, such as the current coronavirus pandemic, policymakers should do everything possible to keep markets working and private incentives strong.

The Real Economic Fallout of COVID-19
Dennis J. Snower (Project Syndicate) Apr 8, 2020
Regardless of how long the current pandemic lasts, the existing organization of economic activities needs to change fundamentally. In particular, governments must support the shift in employment from physically interactive to physically disjointed activities.

The East-West Divide in COVID-19 Control
Jeffrey D. Sachs (Project Syndicate) Apr 8, 2020
The public health response will be decisive in stopping the COVID-19 coronavirus before it devastates entire populations in the West and around the world. And the right approach requires that the United States and Europe learn what we can from East Asia as rapidly as possible.

Price Discovery and Market Segmentation in China's Credit Market
Zhe Geng and Jun Pan (VoxChina) Apr 8, 2020
The recent unprecedented wave of bond defaults in China has captured the attention of investors worldwide. We document a severe segmentation between the pricing of state-owned enterprise (SOE) and non-SOE bonds that arises sharply post 2018. Using our default measure, we find that this market segmentation is not driven by the fundamentals of the firms. We also show that this market segmentation has also caused a segmentation in price discovery— the pricing of non-SOE bonds becomes more efficient amidst market turmoil.

The large and unequal impact of COVID-19 on workers
Abigail Adams-Prassl, Teodora Boneva, Marta Golin, and Christopher Rauh (VoxEU) Apr 8, 2020
The spread of COVID-19 has already had a large negative impact on labour supply and earnings of workers in many countries. In this column, the authors leverage newly collected data from the US and the UK to show that these negative consequences are particularly harsh for younger workers, those with unstable employment relationships and lower labour income. The evidence calls for a quick response from governments in the form of stimulus and labour income replacement packages, and a robust plan to ensure that the younger generation are not permanently disadvantaged.

Intergovernmental relations: How the global crisis led to further decentralisation
Luiz de Mello and João Tovar Jalles (VoxEU) Apr 8, 2020
The global financial and economic crisis has affected economies and societies, including in the ways governments allocate fiscal, financial, policy and political responsibilities among the different layers of administration. This column describes how, in particular, the crisis was associated with an increase in the subnational shares of general government spending and revenue, which are conventional quantitative gauges of fiscal decentralisation. Effects on subnational authority over politics, policy and fiscal-financial management are more nuanced.

India's lockdown
Debraj Ray, Sreenivasan Subramanian, and Lore Vandewalle (VoxEU) Apr 8, 2020
On 24 March, the government of India ordered a nationwide lockdown of 1.3 billion people for 21 days as a preventive measure against COVID-19. Given what we know of the epidemic, it is difficult to quarrel with the prescription of social distancing and lockdown, when accompanied by state measures that provide adequate economic protection. This column asks what happens when the state is unable to provide the necessary back-up welfare measures.

The Fed's radical policies are uncharted territory
FT View Apr 9, 2020
Untangling the distortions to free market capitalism will take time.

Investors should ask who will buy all the new US government debt
Gillian Tett (FT) Apr 9, 2020
The last time America sold war bonds they were essentially a tax on savers.

The danger in the coronavirus recovery will be inertia
Philip Stephens (FT) Apr 9, 2020
A make-do-and-mend approach will not be enough — we need a societal transformation.

Markets are only starting to come to terms with the new normal
Michael Mackenzie (FT) Apr 9, 2020
Investors should be alert to the risk of false dawns in stocks and high-yield credit.

The market may reward companies that kept things going
Bryce Elder (FT) Apr 9, 2020
Political goodwill for Spire Healthcare could act as a tailwind once virus impact eases.

Why the Wealthy Fear Pandemics
Walter Scheidel (NYT) Apr 9, 2020
The coronavirus, like other plagues before it, could shift the balance between rich and poor.

What Was the Last Time an Economy Froze Like This?
Chris Miller (NYT) Apr 9, 2020
Lessons for today from the collapse of the Soviet Union.

The Fed's 'Main Street' Mistake
WSJ Apr 9, 2020
The central bank's terms favor Wall Street and take new credit risks.

European finance ministers ponder coronabonds
Economist Apr 9, 2020
Once again, the euro zone is consumed by rows over debt.

The Coronavirus is Now Exploding in Developing Countries
Robert Guest (Brink) Apr 9, 2020
The coronavirus hit wealthy countries that are plugged into the global system first. But the pandemic is now exploding in developing countries and emerging markets, which have far fewer resources to combat its impacts.

How COVID-19 could push Congress to start reining in vulture capitalism
Elaine Kamarck (Brookings) Apr 9, 2020
The CARES Act marks the first time in many years that lawmakers have taken steps to curb the effects of income inequality. Elaine Kamarck argues that there are important lessons from some of the provisions in the bill that can continue to rein in an out-of-control capitalist system.

Enhancing central bank cooperation in the COVID-19 pandemic
Christopher G. Collins, Simon Potter, and Edwin M. Truman (PIIE) Apr 9, 2020
The G20 should support increased central bank cooperation in providing needed financial resources to countries suffering liquidity crises resulting from COVID-19. On March 26, 2020, G20 leaders congratulated the major central banks for extending temporary swap lines to other central banks in which they provide their currencies in exchange for the receiving central bank's currency. But the major central banks can do more to help countries plunged into crisis through no fault of their own. They can (1) set up facilities to provide cash for sovereign assets in their currencies held by other central banks, (2) provide additional liquidity swap lines where appropriate, and (3) in some critical cases link their swap lines to a backstop from the International Monetary Fund (IMF).

COVID-19: Trump's curbs on exports of medical gear put Americans and others at risk
Chad P. Bown (PIIE) Apr 9, 2020
At a time of frightening shortages of vital medical equipment to fight the COVID-19 pandemic, the Trump administration has taken bold, decisive action—to make the shortages worse. That is the likely consequence of President Donald Trump's decision to invoke the Defense Production Act (DPA) and restrict exports of respirators, surgical masks, and hospital gloves. He directed the Federal Emergency Management Agency (FEMA) to limit American exports of such personal protective equipment (PPE) to Canada, Mexico, and a host of other countries.

A New Measure of Finance for International Development
Ian Mitchell, Euan Ritchie and Andrew Rogerson (CGD) Apr 9, 2020
How much are the flows of global aid and concessional finance?

A Good Idea Executed Badly: Why the World Bank Should Not Renew the Pandemic Emergency Facility Insurance Window
Euan Ritchie and Mark Plant (CGD) Apr 9, 2020
Are pandemic bonds a good idea that has been poorly implemented? A bad idea? Or a good idea but better suited to different circumstances? And crucially, should they be renewed in May as currently planned? We argue no: pandemic bonds are an expensive way to remove risk that the World Bank is perfectly able to bear. However, parametric insurance more generally—the principle underlying pandemic bonds—is nonetheless a sound idea.

Assessing the G20's Finance for International Development
Ian Mitchell and Euan Ritchie (CGD) Apr 9, 2020
We use our new measure–Finance for International Development (FID)–to look at the G20's finance for development and consider which countries can step up their financial contribution, both during COVID-19 and beyond.

Amid Coronavirus Pandemic, China Seeks Larger Role on World Stage
Sam Bresnick and Paul Haenle (CEIP) Apr 9, 2020
China's drastic measures helped contain the coronavirus outbreak, which continues to spread rapidly in the United States. Beijing has seized the moment to expand its global leadership and advertise its governance model.

Italy's Debt Is Less Terrifying Than It Looks
Marcus Ashworth (Bloomberg View) Apr 9, 2020
Rome's borrowings are enormous and need to be fixed eventually, but ECB and EU crisis help might even improve its debt balance this year.

Germany Will Be a Post-Coronavirus Winner
Elena Carletti, Marco Pagano, Loriana Pelizzon and Marti G. Subrahmanyam (Bloomberg View) Apr 9, 2020
Fiscally sound governments will be able to pump money into their companies unhindered by state aid rules. The EU needs an equity fund to level things up.

3D Printers Recast Virus-Weary Supply Chains
Brooke Sutherland (Bloomberg View) Apr 9, 2020
The Covid-19 crisis has posed a number of problems for manufacturers. 3D printing has provided many answers.

Fed Is Seizing Control of the Entire U.S. Bond Market
Brian Chappatta (Bloomberg View) Apr 9, 2020
In a dramatic move, the central bank extends its reach into munis, fallen angels and more.

Get Ready for a Two-Year Economic Slump
Narayana Kocherlakota (Bloomberg View) Apr 9, 2020
U.S. economic policy needs to be based on a realistic forecast of public health policy.

The Normal Economy Is Never Coming Back
Adam Tooze (FP) Apr 9, 2020
The latest U.S. data proves the world is in its steepest freefall ever—and the old economic and political playbooks don't apply.

A Global COVID-19 Exit Strategy
Ngaire Woods and Rajaie Batniji (Project Syndicate) Apr 9, 2020
The COVID-19 pandemic poses an unprecedented threat to both public health and the global economy. Only by ditching nationalist rhetoric and policies, and embracing stronger international cooperation, can governments protect the people they claim to represent.

Africa Needs Debt Relief to Fight COVID-19
Ngozi Okonjo-Iweala and Brahima Coulibaly (Project Syndicate) Apr 9, 2020
Combating COVID-19 is more challenging in Africa than in other parts of the world. But a two-year moratorium on all external-debt repayments would at least give governments there the fiscal space they need to respond to the pandemic.

The COVID-19 Default Time Bomb
Pierre-Olivier Gourinchas and Chang-Tai Hsieh (Project Syndicate) Apr 9, 2020
The world is facing a potential flood of disorderly sovereign defaults at a time when developing-country governments need to be spending huge sums on keeping their citizens healthy. To avoid a catastrophic outcome, the International Monetary Fund should coordinate a broad debt moratorium.

COVID-19 is the IMF's Chance for Redemption
Jayati Ghosh (Project Syndicate) Apr 9, 2020
After decades of failing to fulfill the explicit purpose for which it was created, the International Monetary Fund now finds itself uniquely positioned to facilitate a globally coordinated response to the COVID-19 crisis. But to make good on its potential, the Fund first needs to abandon some bad old ideas.

Pandemic Socialism
Willem H. Buiter (Project Syndicate) Apr 9, 2020
By introducing a uniquely disruptive shock to both supply and demand, the COVID-19 pandemic has upended longstanding ideological debates almost overnight. Suddenly, far-reaching state intervention in the economy has become necessary to save market capitalism, which is unlikely to emerge unchanged.

Trade and the COVID-19 crisis in developing countries
Alvaro Espitia, Nadia Rocha, and Michele Ruta (VoxEU) Apr 9, 2020
The COVID-19 pandemic is increasingly a concern for developing countries. This column shows that most developing countries rely heavily on imports to meet their needs of medical supplies essential to combat COVID-19. Recently imposed export restrictions by leading producing countries could thus cause significant disruptions in supplies for developing countries and might further contribute to price increases of medical supplies. Taking multiplier effects into account, prices for medical supplies are estimated to rise by up to 23% on average. Tariffs and other restrictions to imports further impair the flow of critical products to developing countries.

Pandemics and asymmetric shocks
Guido Alfani (VoxEU) Apr 9, 2020
The ultimate effects of the COVID-19 pandemic are impossible to foretell. This column examines major plague episodes from the past millennium to draw lessons for the current crisis. The effects of the 14th century Black Death and 17th century plagues were heterogeneous, depending on multiple epidemiological factors and initial conditions. Some regions recovered quickly, while others suffered prolonged economic damage. Dealing with the asymmetric shocks of COVID-19 and preventing similar economic collapse calls for coordination and collective action by affected countries.

COVID-19: Economic policy and market expectations
Stephanie Ettmeier, Chi Hyun Kim, and Alexander Kriwoluzky (VoxEU) Apr 9, 2020
The ongoing COVID-19 pandemic in Europe is severe and spreads economic uncertainty. This column explores the evolution of financial market participants' expectations during the COVID-19 pandemic, estimating yield curves of bonds in France, Germany, Italy, and Spain. The authors carry out an event study to investigate the potential impact of European fiscal and monetary policy measures on these yields. The results suggest that policy measures must be large and coordinated on the European level, and that fiscal and monetary policy must act jointly to fight the pandemic's negative economic consequences.

Open Borders: Scapegoat in COVID-19
Samah Rafiq (YaleGlobal) Apr 9, 2020
Restricting travel is not a substitute for strong public health measures

What Might a "Phase 4" Fiscal Package Include?
Michael Pugliese and Hop Mathews (WF) Apr 9, 2020
Talk has already begun to swirl about a "Phase 4" fiscal package in Congress. We believe such a plan would likely look a lot like the "Phase 3" agreement that just became law a couple weeks ago.

Monetary financing demands sober management
Martin Wolf (FT) Apr 10, 2020
It is simply another policy tool, neither the royal road to hyperinflation nor a cure-all.

The eurozone is at risk of a debt crisis worse than the last one
Moritz Kraemer (FT) Apr 10, 2020
Most vulnerable member states are starting from a significantly weaker position.

Smaller wealth managers will be all the more vulnerable after the crisis
Stefan Wagstyl (FT) Apr 10, 2020
Even if revenues are boosted temporarily, the overall impact on private banking will be disruptive.

China should not count its successes too soon
George Magnus (FT) Apr 10, 2020
The economy may no longer be in freefall but it faces a demand shock as well as other headwinds.

Global Trade Sputters, Leaving Too Much Here, Too Little There
Ana Swanson (NYT) Apr 10, 2020
As the pandemic stretches on, consumers and businesses could run short of some products in months to come.

Everything Is Awful. So Why Is the Stock Market Booming?
Neil Irwin (NYT) Apr 10, 2020
Investors are betting that powerful interventions from Washington will protect the long-term profitability of major companies.

Saving the Eurozone From the Virus
WSJ Apr 10, 2020
Leaders resist attempts to remake the currency bloc during a crisis.

The Fed Needs to Move Faster
Hal Scott (WSJ) Apr 11, 2020
The central bank's announcements have stabilized markets—for now—but its Main Street lending facility has too many limits and complications.

OPEC+ deal won't save Covid-19 crashed oil prices
Tim Daiss (AT) Apr 10, 2020
Tentative oil production cut agreement will trim supply but not boost virus-hit demand while renewables set to be the biggest loser.

The Coronavirus Shock Looks More like a Natural Disaster than a Cyclical Downturn
Jason Bram and Richard Deitz (FRBNY Liberty St Econ) Apr 10, 2020
It's tempting to compare the economic impact of the coronavirus pandemic to that of prior business cycle downturns, particularly the Great Recession. However, a more appropriate comparison would be to the effects of a severe natural disaster. This post tracks the recent path of U.S. unemployment claims, finding a much closer precedent in post-Katrina Louisiana than in the U.S. economy following the Great Recession.

The perils of more debt
Maria Demertzis and Nicola Viegi (Bruegel) Apr 10, 2020
Europe must find the "Ways and Means".

Global growth plunges; Pace of future rebound hinges on reducing economic scarring and coronavirus testing and tracking
PIIE Apr 10, 2020
Global economic activity is dropping at an unprecedented pace, with US output on track to decline at an annual rate of 50 percent or more in the second quarter and then resume growth in the second half of the year, the Peterson Institute for International Economics (PIIE) forecasts in its semiannual Global Economics Prospects outlook released today.

The pandemic will plunge the world into recession; recoveries will be mixed
Karen Dynan (PIIE) Apr 10, 2020
Economic shutdowns and containment measures to stop the spread of COVID-19 have caused a sharp decline in global economic activity. The pandemic is sending the world into a recession that is much deeper than the contraction that followed the global financial crisis. Normal activity will be restored only gradually because economic structures will be damaged and creating systems of effective testing and tracking of infected individuals will be difficult. For 2020 as a whole, global economic output is likely to decline 3½ percent. The depth of the recession and speed of recovery in individual countries will vary depending on the strength of their economies going into the crisis, their ability to put effective policies in place to contain the virus, and their exposure to trade and commodity price shocks.

The Fed Expands Emergency Lending by $2 Trillion
Joseph E. Gagnon (PIIE) Apr 10, 2020
The unprecedented nature of the coronavirus-induced shutdown of the economy calls for unprecedented steps to keep firms and state and local governments alive and ready to resume normal operations as soon as it is safe to do so. The latest action to that end came on April 9 when the Federal Reserve, in partnership with the Treasury Department, set up new emergency facilities and expanded existing ones with a combined lending capacity of $2.3 trillion, more than 10 percent of US GDP. The facilities can extend credit to businesses of all sizes plus hard-pressed states and localities, leveraging funds appropriated by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

IMF's special drawing rights to the rescue
Christopher G. Collins and Edwin M. Truman (PIIE) Apr 10, 2020
The International Monetary Fund (IMF) has been the central institution of monetary cooperation for 75 years. It is again in the COVID-19 pandemic. However, its financial resources are limited to about $790 billion. Unlike a central bank, the Fund cannot expand its balance sheet with the click on a keyboard. It does, however, have one tool to augment instantaneously the international reserves of its members: allocating special drawing rights (SDR). G20 leaders should agree to support a $500 billion SDR allocation, which would instantly increase each IMF member's international reserves. It would significantly benefit poorer countries and help build confidence at a time of global crisis, dramatically demonstrating international cooperation.

Exchange rate policy in the COVID-19 pandemic
Christopher G. Collins and Joseph E. Gagnon (PIIE) Apr 10, 2020
Exchange rate pressures in the COVID-19 pandemic are an important signal to global policymakers of underlying economic stress. Aggressive and coordinated policy responses within the G20 and the wider world can aid vulnerable economies and damp excessive currency swings. Key measures include central bank swap lines, increased resources for international financial institutions, and avoiding protectionist policies.

The World in 2020, as forecast by The Economist
Indermit Gill (Brookings) Apr 10, 2020
The only benefit of the coronavirus pandemic is that I've been able to catch up on my reading. Last week, I went through a stack of unread issues of my favorite newspaper, The Economist. I saved for last the newspaper's annual exercise in forecasting called "The World in 2020." If you have a subscription, you can find it here. If you don't, no worries. This blog summarizes some of it. Besides, as you might already have guessed, The Economist won't help you figure out what's going to happen this year. The issue's print close was November 5, 2019 and, like the rest of us, the editorial team had no clue that events that had just started to unfold in Wuhan would upend everything everywhere.

OPEC+ and the G-20 Say 'Yes' To Duress
Liam Denning (Bloomberg View) Apr 10, 2020
To cut or not to cut isn't even a question for oil producers facing a Covid-19 demand shock.

Italy Will Struggle to Sell the EU Rescue Deal at Home
Ferdinando Giugliano (Bloomberg View) Apr 10, 2020
There are two problems with the finance ministers' plan: it creates political difficulties for Rome and it doesn't answer the long-term debt question.

Hong Kong's the Canary in the Coronavirus Economy
Nisha Gopalan (Bloomberg View) Apr 10, 2020
The city was the first to adopt direct cash handouts. Its long-term wage subsidies may be another harbinger.

No, GDP Isn't Really Going to Shrink 30%
Justin Fox (Bloomberg View) Apr 10, 2020
The U.S. practice of reporting quarterly GDP growth as an annualized number is about to make the Covid-19 downturn look a lot deeper than it is.

Europe's New Defining Moment
Xavier Vives (Project Syndicate) Apr 10, 2020
The COVID-19 pandemic represents a major opportunity for the European Union and the eurozone to act decisively on a common problem, thereby strengthening the bloc's solidarity and integration. So far, however, European leaders have failed to seize it.

A COVID-19 Marshall Plan for Europe
Philippe Legrain (Project Syndicate) Apr 10, 2020
The sheer scale of the economic fallout from COVID-19 justifies extraordinary measures, and nowhere more so than in Europe. Rather than questioning one another's motives, EU member states urgently need to unite behind a joint plan to avert economic disaster.

The Human-Capital Costs of the Crisis
Barry Eichengreen (Project Syndicate) Apr 10, 2020
Unlike a hurricane or earthquake, the coronavirus pandemic has caused no damage to physical capital stock. But firm-specific skills have no value when the firm that uses them goes out of business, which is one reason why US productivity, wages, and economic growth are likely to be affected for years to come.

Globalisation and financial contagion
Olivier Accominotti, Marie Briere, Aurore Burietz, Kim Oosterlinck, and Ariane Szafarz (VoxEU) Apr 10, 2020
For many years, globalisation was on the march, bringing with it the increased risk of financial contagion effects. The Global Crisis reversed this expansion and highlighted the vulnerabilities intrinsic to the globalised international economy. This column takes a historical approach to the debate, analysing how patterns of globalisation and contagion have changed over time. The patterns also suggest that the ongoing Covid-19 pandemic is likely to cause another enormous 'stress test' for globalisation, forcing firms and nations to limit traveling and trade, perhaps leading to a reevaluation of the international system.

The coming battle for the COVID-19 narrative
Samuel Bowles and Wendy Carlin (VoxEU) Apr 10, 2020
Like the Great Depression and WWII, the COVID-19 pandemic (along with climate change) will alter how we think about the economy and public policy, not only in seminars and policy think tanks, but also in the everyday vernacular by which people talk about their livelihoods and futures. It will likely prompt a leftward shift on the government-versus-markets continuum of policy alternatives. But more important, it may overturn that anachronistic one-dimensional menu by including approaches drawing on social values going beyond compliance and material gain.

COVID, remobilisation and the 'stringency possibility corridor': Creating wealth while protecting health
Richard Baldwin (VoxEU) Apr 10, 2020
The world is at war with COVID-19; containment policies are a key weapon. But this in not 'total war' where trade-offs can be waved off; governments must perform balancing acts. This column argues that instead of thinking of containment stringency as balancing dollars versus deaths, we should think of it as a balancing infections versus tolerability. Containment policies must stay in the 'corridor' where they are stringent enough to avoid overwhelming hospitals, but lax enough to avoid overwhelming citizens' tolerance levels. Solving the dilemma will require an increase in production and a relaxation of constraints – in short, it will involve a partial remobilisation of the workforce. The mission-critical task facing us is to develop a strategy for remobilising workers without risking a medical overload.

COVID-19, teleworking, and productivity
Masayuki Morikawa (VoxEU) Apr 10, 2020
Japan, similar to many countries hit by the COVID-19 shock, has experienced a sudden increase in people working from home. This column exploits the teleworking arrangements implemented at the author's workplace to investigate the impact on productivity. In a survey, workers indicate that they are, on average, less productive at home than in the office. While some of the reasons for this, such as lack of familiarity with remote access software, will fade over time, other factors suggest that a productivity gap will remain.

Monetisation: Do not panic
Olivier Blanchard and Jean Pisani-Ferry (VoxEU) Apr 10, 2020
The extraordinary operations that are under way in most countries in response to the COVID-19 shock have raised fears that large-scale monetisation will result in a major inflation episode. This column argues that so far, there is no evidence that central banks have given up, or are preparing to give up, on their price stability mandate. While there are obviously some reasons to worry, central banks are doing the right thing and the authors see no reason to panic.

Japan Is Testing the Limits of Pandemic Economics
William Sposato (FP) Apr 10, 2020
Can the world's most indebted country afford a $1 trillion stimulus?

The Climate Club
William Nordhaus (FA) Apr 10, 2020
How to fix a failing global effort.

The best way to reboot the economy is to revive the Trump approach
Andy Puzder (WP) Apr 11, 2020
During times of rapid innovation and economic disruption, pro-growth, free-market policies take on an added importance.

The changes covid-19 is forcing on to business
Economist Apr 11, 2020
The big ones are oddly familiar.

Demand and the skill-premium puzzle
Justin Caron, Thibault Fally, and James Markusen (VoxEU) Apr 11, 2020
Economists typically look to production and trade in order to explain various empirical phenomena. However, recent research has emphasised the role of demand in understanding several remaining empirical puzzles. This column discusses the implications of demand for the skill-premium puzzle. Goods and services with high income elasticities of demand are systematically skilled-labour intensive in production. Simulations then show that neutral productivity growth and/or falling trade costs increase the skill premium for virtually all countries. These results are particularly important for understanding why skill premia have increased in most developing countries, contrary to predictions from standard trade models.

How the next euro crisis could unfold
Wolfgang Münchau (FT) Apr 12, 2020
What if Italy cannot service its debt and a future government is tempted to default?

A Brexit extension would still face serious opposition
Tim Bale (FT) Apr 12, 2020
Those who think such a decision is obvious need to avoid the repeated mistakes of Remainers.

Mobile cash can help Africa fight Covid-19
Faure Essozimna Gnassingbé (FT) Apr 12, 2020
Without it, locked down informal workers face death by disease or hunger.

Don't blame the politicians. Blame the economists.
Robert Samuelson (WP) Apr 12, 2020
What we conveniently overlooked was the need to preserve our borrowing power for an unknown crisis that requires a huge cash infusion.

The most serious crisis of all
Barry Eichengreen (EAF) Apr 12, 2020
It's not just the real-time experience from other countries that informs policy responses. Responses are heavily informed by narratives entrapped from history. In seeking to avoid past mistakes, we risk committing new ones.

Containing the virus and restarting the Chinese economy
Cai Fang (EAF) Apr 12, 2020
Lessons from China's experience and the difficulties faced as it tries to revive its economy while the rest of the world is still in lockdown.

A 100-Year Chance to Shake Up Debt and Taxes
Andy Mukherjee (Bloomberg View) Apr 12, 2020
Deductible interest grew out of the crises of 1918. The Covid-19 upheaval should be used to roll it back.

The Historic Oil Price Truce Won't Last
Julian Lee (Bloomberg View) Apr 12, 2020
The great battle for market share between the Americans, the Saudis and the Russians will probably restart once demand for crude oil returns.

More Shock and Awe Stimulus May Be Needed
Mohamed A. El-Erian (Bloomberg View) Apr 12, 2020
Governments and central banks are betting that one big set of relief measures will address the disruption caused by Covid-19. It may not be enough.

Swap innovation, then and now
Robert McCauley and Catherine R. Schenk (VoxEU) Apr 12, 2020
A major source of vulnerability during global financial crises, both in the past and at present, is the severe shortage of US dollar funding around the world. This necessitates extensive central bank cooperation, in the form of central bank swap lines and other innovative solutions, to relieve the strain on dollar liquidity. This column evaluates the close cooperation between the Fed, BIS and other central banks in response to a strained eurodollar market in the 1960s, and compares this to other episodes in the 1990s, 2008 and 2020. The wide system of swaps that existed in the past amounted to a global financial net aimed at managing dollar liquidity and stabilising exchange rates.

New issuance of SDRs is vital to help poorer countries
FT View Apr 13, 2020
Emerging markets cannot cover their external financing needs on their own.

Federal Reserve has encouraged moral hazard on a grand scale
Jonathan Tepper (FT) Apr 13, 2020
Chair Powell has gone from preaching about credit risks to buying junk bond funds.

Banks should not be shamed into a do-gooder lending binge
Patrick Jenkins (FT) Apr 13, 2020
The middle of crisis of deepening and unknown scale is not the time to increase leverage.

Oil accord highlights the new world disorder
FT View Apr 13, 2020
Historic supply cut deal turns previous assumptions on their head.

Coronavirus and the threat to US supremacy
Gideon Rachman (FT) Apr 13, 2020
Two questions serve as a reality check on excessive American declinism.

G20 nations close in on debt deal for poor countries
Andrew England, Jonathan Wheatley, and James Politi (FT) Apr 13, 2020
Proposed six-month freeze on payments aims to avoid emerging market health crisis.

The Art of an Oil Deal
WSJ Apr 13, 2020
Trump uses diplomacy to limit the harm to U.S. shale producers.

Give Relief to Small Businesses, Not Big Banks
Ali Wambold (WSJ) Apr 13, 2020
More money is crucial, but so are new rules to ensure that it helps the most vulnerable employees.

A Glimmer of Hope for Greece
Yannis Palaiologos (WSJ) Apr 13, 2020
The state has so far responded capably to the public-health threat, earning the people's trust and compliance.

We Need to Talk About What Coronavirus Recoveries Look Like
Fiona Lowenstein (NYT) Apr 13, 2020
They're a lot more complicated than most people realize.

Great Depression stalks virus-ravaged economies
Gordon Watts (AT) Apr 13, 2020
The specter of a 1930s-style global tragedy looms large amid the fallout from the Covid-19 pandemic.

The G20 not only should but can be meaningfully useful to recovery from the COVID-19 pandemic
Maurice Obstfeld and Adam S. Posen (PIIE) Apr 13, 2020
The global financial crisis of 2008–10 brought the Group of Twenty (G20) into being. Nearly 12 years later, what we have misleadingly called the postcrisis period has proven to be a mere pause between savage global shocks—this one the result of a global pandemic—demonstrating that international cooperation is a recurrent need. The G20 must rise urgently to the challenge as it did in the last global crisis, but even more forcefully with more lasting commitment.

Europe makes a down payment on economic solidarity
Jacob Funk Kirkegaard (PIIE) Apr 13, 2020
In the face of skepticism and even derision, the Eurogroup and the European Union's beleaguered 27 EU finance ministers agreed on April 9 to a package of mutually financed emergency rescue measures, signaling European economic solidarity over the COVID-19 pandemic. The agreement includes several important precedent setting decisions and should help facilitate a more ambitious joint economic recovery plan by the EU Council of national leaders later in April.

What to do about the coming debt crisis in developing countries
Homi Kharas (Brookings) Apr 13, 2020
Emerging markets and developing countries have about $11 trillion in external debt and about $3.9 trillion in debt service due in 2020. Of this, about $3.5 trillion is for principal repayments. Around $1 trillion is debt service due on medium- and long-term (MLT) debt, while the remainder is short-term debt, much of which is normal trade finance.

Post-Pandemic Interest Rates: Lower for Longer
Joachim Fels (PIMCO) Apr 13, 2020
Evidence from decades and even centuries ago, plus the unique circumstances of the current global health crisis and its economic impact, suggests we can expect a "New Neutral 2.0" of lower interest rates for longer.

Why This Bubble Economy Keeps Going and Going
Thorsten Polleit (Mises Wire) Apr 13, 2020
Current global bailouts may put off global busts for quite some time. But they will weaken output and employment gains. People's standard of living will stagnate or even fall, even in the short term. With this comes impoverishment and perhaps even social unrest.

The Fed's Balance Sheet Skyrockets as It Doubles Down on Inflating Asset Prices
Ryan McMaken (Mises Wire) Apr 13, 2020
The Fed's portfolio is now 35 percent larger from the time the Fed promised to "taper" back its portfolio and "normalize." It is increasingly clear that there will not be any normalization. Ever.

Suspend Emerging and Developing Economies' Debt Payments
Carmen M. Reinhart and Kenneth Rogoff (Project Syndicate) Apr 13, 2020
Leaders of the world's largest economies must recognize that a return to "normal" in our globalized world is not possible so long as the pandemic continues its grim march. It is myopic for creditors, official and private, to expect debt repayments from countries where those resources would have to be diverted from combating COVID-19.

COVID-19 Thrives on Inequality
Chema Vera (Project Syndicate) Apr 13, 2020
Although the coronavirus affects everyone, it has exposed extreme global inequalities more profoundly than any previous crisis, because it directly exploits those inequalities. Only a massive increase in rich-country support for developing countries can stop the pandemic and prevent a global economic collapse.

Anatomy of the Coronavirus Collapse
Eswar Prasad and Ethan Wu (Project Syndicate) Apr 13, 2020
The world economy is experiencing a severe, simultaneous, and universal collapse unlike anything seen since World War II. And while the downturn could prove sharp but short, a more realistic assessment points to a long and protracted global recession.

Viral Authoritarianism
Patrick Gaspard (Project Syndicate) Apr 13, 2020
In the rush to mitigate a public-health emergency like the COVID-19 pandemic, illiberal governments around the world are testing the limits of civil rights and democratic checks and balances. As history has shown time and again, there is no better moment than an emergency for aspiring strongmen to consolidate power.

COVID-induced economic uncertainty and its consequences
Scott Baker, Nicholas Bloom, Steven Davis, and Stephen Terry (VoxEU) Apr 13, 2020
While assessing the economic impact of COVID-19 is essential, it is challenging due to the extreme speed with which the crisis unfolded. This column uses three forward-looking uncertainty measures to quantify the enormous increase in economic uncertainty over the past weeks. Feeding these COVID-induced uncertainty shocks into a model of disaster effects predicts a year-on-year contraction in US real GDP of nearly 11% as of 2020 Q4. About 60% of the forecasted output contraction is estimated to be due to COVID-induced uncertainty.

Some micro/macro insights on the economics of coronavirus. Part 3
Christian Gollier and Stephane Straub (VoxEU) Apr 13, 2020
What should we be willing to sacrifice in wellbeing in order to guard collectively against very infrequent but extraordinarily intense events? This column asks this question in the context of France's preparation for a pandemic, and argues that the allocation of public investments should be reviewed using scientifically based evaluation tools under uncertainty, using asset pricing theory, decision theory and real option valuation.

Remobilising the workforce for 'World War COVID'
Richard Baldwin (VoxEU) Apr 13, 2020
Governments are thinking about ways to exit the COVID containment policies currently in place. While 'exit' is too optimistic of a word, the necessity is clear. This column argues that we should not think of this as a 'dollars versus deaths' trade-off, but rather as a constrained optimisation with two conflicting imperatives: keeping containment stringent enough to achieve the medical imperative, but lax enough to avoid overstretching citizens' tolerance. Remobilising the workforce is a key element of the latter. This column uses the two-constraints approach that I introduced last week to think ahead about the various exit strategies.

Mitigating COVID-19 Effects with Conventional Monetary Policy
Vasco Cúrdia (FRBSF Econ Letter) Apr 13, 2020
The Federal Reserve slashed the federal funds rate in response to the effects of the COVID-19 pandemic. The full impact of the pandemic on the economy is still uncertain and depends on many factors. Analysis suggests that allowing the federal funds rate to fall fast will help the economy cope with the aftermath of COVID-19. In particular, the limited policy space due to the effective lower bound of the federal funds rate before the pandemic reinforces rather than offsets the need for a rapid funds rate decline.

Small businesses deserve better rescue deals
FT View Apr 14, 2020
Grants, not just loans, should form part of support during pandemic.

Markets and economists are still too upbeat on coronavirus
Mohamed El-Erian (FT) Apr 14, 2020
Sentiment is too bullish, judging by price-earnings ratios and credit spreads.

The calls for sovereign debt relief are mounting
Claire Jones (FT) Apr 14, 2020
Here's the economic case for it, and the risks.

Europe and the US need a soft economic restart
Hakan Samuelsson (FT) Apr 14, 2020
Factories in China show how a recovery can be handled safely.

The world economy is now collapsing
Martin Wolf (FT) Apr 14, 2020
A microbe has overthrown our arrogance and sent global output into a tailspin.

Our plan to reopen the economy relies on an incorrect assumption
David Von Drehle (WP) Apr 14, 2020
Until then, don't bet on a smooth or easy reopening of the complex U.S. economy.

More 'Stimulus' Would Crush the Recovery
Phil Gramm and Michael Solon (WSJ) Apr 14, 2020
Federal borrowing this year is set to pass 20% of GDP. That will raise costs across the private economy.

China's trade stats fail to pierce virus gloom
Gordon Watts (AT) Apr 14, 2020
Upbeat export numbers from the world's second-largest economy are overshadowed by the Covid-19 pandemic.

US-China decoupling: a reality check
David P. Goldman (AT) Apr 14, 2020
The idea of an economic divorce is attractive to many, but it would undermine America's strategic interests.

Anti-Crisis Euro Package: Not Good Enough
Nicola Mai (PIMCO) Apr 14, 2020
With euro area output expected to drop by almost 10% this year, and unemployment and fiscal deficits to rise, an ample, blunt and well-coordinated response from European ministers was warranted. However, the new measures announced by finance ministers last week disappointed – again.

The Great Lockdown: Worst Economic Downturn Since the Great Depression
Gita Gopinath (IMF) Apr 14, 2020
April World Economic Outlook projects global growth in 2020 to fall to -3 percent.

COVID-19 Crisis Poses Threat to Financial Stability
Tobias Adrian and Fabio Natalucci (IMF) Apr 14, 2020
The COVID-19 pandemic has caused an unprecedented human and health crisis. The measures necessary to contain the virus have triggered an economic downturn. At this point, there is great uncertainty about its severity and length. The latest Global Financial Stability Report shows that the financial system has already felt a dramatic impact, and a further intensification of the crisis could affect global financial stability.

COVID-19 uncertainty and the IMF
Douglas A. Rediker and Heidi Crebo-Rediker (Brookings) Apr 14, 2020
In the run-up to this week's Virtual Spring Meetings, the International Monetary Fund (IMF) has stepped up and provided much-needed leadership to assure countries and financial markets that they have the resources and tools necessary to help address the worst global economic crisis since the institution was created in 1945. But, precisely because the IMF is moving so aggressively to provide vital emergency support to countries seeking assistance, it is at risk of sometimes using overly optimistic assumptions to allow it to do so, finding some countries' debt to be sustainable when, in fact, the COVID-19 crisis presents such vast uncertainty that no one knows whether it really is.

Solving both the short- and long-term COVID-19 crises
Mahmoud Mohieldin and Michael Kelleher (Brookings) Apr 14, 2020
The global COVID-19 health and economic crisis compels us to act in the short-term—in the here and now. We can't look away from the human health consequences without giving our best efforts to lessen the suffering of those infected.

The world economy in 2020—the IMF gets it mostly right
Indermit Gill (Brookings) Apr 14, 2020
he International Monetary Fund (IMF) just published its World Economic Outlook for 2020 and 2021. To nobody's surprise, it says that "the global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008–09 financial crisis." The U.S. economy is projected to shrink this year by 5.9 percent and the euro area by 7.5 percent; China will grow at a measly 1.2 percent.

Never Let a Crisis Go To Waste
Jürgen Zattler (CGD) Apr 14, 2020
The coronavirus is spreading and for the first time in history virtually all people on earth are faced with the same, imminent common threat. With multifold stories of individual suffering and an unprecedented global lockdown, there is an intensifying call for an internationally coordinated response; it is in every country's interest to think and act globally.

Tracking the World Bank's Response to COVID-19
Julian Duggan and Justin Sandefur (CGD) Apr 14, 2020
Today the IMF forecast the onset of a global recession deeper than any seen since the 1930s and this week the World Bank is expected to announce that the decades-long fall in global poverty is about to shift into reverse. Millions of the people who will be hit hardest by the global economic downturn unleashed by COVID-19 live in countries with little or no social safety net, and limited capacity to muster any fiscal response.

Central Banks around the World Embrace Unprecedented "Quantitative Easing"
Ryan McMaken (Mises Wire) Apr 14, 2020
From New York to London to Brussels to Tokyo, central banks in the last two weeks have embraced a wide variety of extraordinary inflationary measures to prop up insolvent banks and governments.

Will the Covid-19 response bring inflation or higher taxes?
Brian Caplen (Banker) Apr 14, 2020
It took the UK a decade to get its finances back into shape after the financial crisis. With the economic damage from the coronavirus looking much worse, writes Brian Caplen, drastic solutions will be needed.

Will COVID-19 Devastate the Indian Economy?
Venkatachalam Anbumozhi (Brink) Apr 14, 2020
A report predicts that in the next two months, as many as 100 million people in India are likely to contract the COVID-19 infection, a number that will continue to soar through July. The economic impact of COVID-19 on India will depend on a number of factors — the key is whether the Indian health care system can respond quickly.

China's Global Role: The 2010 Perspective
Stephen S. Roach (Globalist) Apr 14, 2020
Why does China have to step up and take the helm of global economic reform?

A Seven-Point Checklist for Reopening the Economy
Michael R. Strain (Bloomberg View) Apr 14, 2020
There will be setbacks, and Congress has to commit to propping up the economy over the long term.

Coronavirus Chaos Is the IMF's Biggest Test Ever
Clive Crook (Bloomberg View) Apr 14, 2020
What the world needs most right now is a lender of last resort.

The Great Recession Was Bad. The 'Great Lockdown' Is Worse.
James Greiff (Bloomberg View) Apr 14, 2020
The IMF predicts this year's economic slump will be the worst since the Great Depression. Bloomberg Opinion columnists weigh in.

Be Prepared for the Profitless Coronavirus Recovery
Conor Sen (Bloomberg View) Apr 14, 2020
Past rebounds had slow job growth. This time, persistent social distancing will make business less efficient.

Don't Count the Fracking Industry Out Just Yet
David Fickling (Bloomberg View) Apr 14, 2020
These businesses have worked through tumbling oil prices before. If anything, it made them stronger.

Putin's Oil Deal Is Humiliating But Unavoidable
Clara Ferreira Marques (Bloomberg View) Apr 14, 2020
Russia couldn't really avoid participating in the OPEC+ deal, but this doesn't mean the output cuts will be easy for its aging oil fields.

Avoiding a COVID-19 Migration Crisis
Md. Shahidul Haque (Project Syndicate) Apr 14, 2020
Refugees stand the most to lose from COVID-19 as the virus ratchets up extreme nationalism. Unless the strategy to defeat the coronavirus emphasizes inclusiveness, courage, and collaboration, without distinction or discrimination, it will not succeed.

Agriculture After the Pandemic
Wandile Sihlobo (Project Syndicate) Apr 14, 2020
After suffering severe labor shortages due to the COVID-19 pandemic, it seems unlikely that advanced-economy farmers will return to business as usual. Instead, many will probably attempt to mitigate the risks stemming from dependence on foreign seasonal workers by automating more of their operations.

The Great Whiplash
Kaushik Basu (Project Syndicate) Apr 14, 2020
Before we become swept up in collective hysteria, we should remember that we were foolish to remain complacent in the initial months after COVID-19 emerged. Dizzy with whiplash, we may prove similarly foolish in assuming that only disaster lies ahead.

Blaming China Is a Dangerous Distraction
Jim O'Neill (Project Syndicate) Apr 14, 2020
Nobody denies that Chinese officials' initial effort to cover up the coronavirus outbreak in Wuhan at the turn of the year was an appallingly misguided decision. But anyone who is still focusing on China's failings instead of working toward a solution is essentially making the same mistake.

How the G20 Should Lead, Again
Hong Nam-ki (Project Syndicate) Apr 14, 2020
Following a virtual summit on March 26, the G20 is now working to devise an action plan for addressing both the COVID-19 pandemic and the resulting economic crisis. While the task today is more difficult than it was after the 2008 global financial crisis, we know from past disasters that solidarity is the only solution.

A Biological Clock Explanation for the Gender Gap in Earnings: Import Competition Increases Female Fertility
Wolfgang Keller and Hâle Utar (VoxDev) Apr 14, 2020
Rising import competition from emerging countries such as China, which are increasingly integrated in the global economy, have led to lower labor market opportunities in many high-income countries, especially for middle-class manufacturing workers (see Keller and Utar, 2019). This article shows that the implications of rising import competition go beyond the labor market and also affect family size and structure.

How the IMF should respond to an emerging markets crisis
Tobias Krahnke (VoxEU) Apr 14, 2020
Fears of a next wave of emerging market debt crises recently sparked a renewed debate about the adequacy of IMF resources and its toolkit. This column argues that the issue is not whether the IMF has sufficient resources for large-scale financial assistance to all of its members in need, but that such assistance would ultimately be counterproductive and could, in fact, exacerbate the risk of liquidity crises morphing into solvency crises. One of the reasons is that large-scale IMF financial assistance coupled with the IMF's preferred creditor status can lead to a crowding-out of private investors by increasing their expected loss in the event of default. This underlines the need for all elements of the international monetary and financial system to assume their full responsibility, including the private sector.

Agribusiness-led development and farming profits
Swati Dhingra and Silvana Tenreyro (VoxEU) Apr 14, 2020
Nearly 80% of the world's poorest inhabitants live in rural areas and labour in agriculture. Because they lack the productive assets or infrastructure needed to market their produce, strategies intended to encourage agribusinesses-led development of such markets rank high on many policy agendas. Still, systematic studies of the efficacy of these policies remain scarce. This column examines the impact that promoting agribusiness-participation in crop markets has made in Kenya, and concludes that such policies are no panacea for low agricultural incomes.

Minimum effective tax rate on global multinational profits
Sébastien Laffitte, Julien Martin, Mathieu Parenti, Baptiste Souillard, and Farid Toubal (VoxEU) Apr 14, 2020
National healthcare and other public services, currently under increasing pressure due to the COVID-19 pandemic, have been underfunded in many countries, an issue that has likely been exacerbated by corporate tax avoidance. Some multinationals that have been avoiding corporate taxes for years are about to be bailed out by national governments, arousing a public sentiment of unfairness. This column argues that setting a minimum effective tax rate on the global profit of multinational companies would tackle these concerns.

Will Japan's State of Emergency Kickstart a Telework Tech Culture?
Thisanka Siripala (Diplomat) Apr 14, 2020
Despite a state of emergency declared in parts of Japan, businesses have been slow to expand a work culture away from the office.

The Coronavirus Threatens Some More Than Others
Audrey Wilson (FP) Apr 14, 2020
Refugees, migrant laborers, and the global poor are especially susceptible to the pandemic. There's little time to bridge the gap between haves and have-nots.

How to Stop a Looming Food Crisis
Maximo Torero (FP) Apr 14, 2020
Trade restrictions are breaking supply chains, and coronavirus lockdowns are preventing laborers from working on farms. Countries need to step back and stop panicking.

IMF's grim forecasts show financial risks loom
FT View Apr 15, 2020
Economic fallout from coronavirus will hit bank balance sheets.

How coronavirus exposed Japan's low-tech blind spot
Leo Lewis (FT) Apr 15, 2020
A country celebrated for innovation has been found wanting by the new reality of remote working.

A better society can emerge
Amartya Sen (FT) Apr 15, 2020
History shows some crises lead to improved equality and access to food and healthcare.

Why the record Opec cut is no match for coronavirus hit to demand
Derek Brower (FT) Apr 15, 2020
Traders remain unconvinced by assurances that supply curbs will be twice the stated amount.

US holds off on IMF plan to boost emerging economies' finances
James Politi (FT) Apr 15, 2020
World leaders call for expansion of liquidity measures for virus-hit nations.

Coronavirus threatens to shake up the expat supply chain
John Reed (FT) Apr 15, 2020
Multinationals operating in Asia will need to re-examine their deployment of foreign staff.

Only victory in Africa can end the pandemic everywhere
Various (FT) Apr 15, 2020
World leaders call for an urgent debt moratorium and unprecedented health and economic aid packages.

Think This Pandemic Is Bad? We Have Another Crisis Coming
Rhiana Gunn-Wright (NYT) Apr 15, 2020
Addressing climate change is a big-enough idea to revive the economy.

Europe Goes Back to Work
WSJ Apr 15, 2020
More countries experiment with gradual reopening.

A Fed Bailout Is Wrong for States and Cities
Robert C. Pozen (WSJ) Apr 15, 2020
The central bank should adjust its lending methods to prevent abuse by profligate local governments.

Weak exports will not stall China's manufacturing recovery
Nicholas R. Lardy and Tianlei Huang (PIIE) Apr 15, 2020
China's manufacturing sector appears to be well on the road to recovery. Some argue that the inevitable global recession resulting from the COVID-19 pandemic will weaken China's manufactured exports, suggesting that this recovery cannot be maintained. But such analyses overstate the importance of exports in China's growth.

Is the United States reneging on international financial standards?
Nicolas Véron (PIIE) Apr 15, 2020
The financial shock surrounding the COVID-19 pandemic has prompted the Federal Reserve to temporarily loosen an important capital-to-asset ratio requirement for US banks. In so doing, it is walking away from a decade-long commitment to global financial reforms forged in the wake of the global economic meltdown of 2008–10.

Looking Beyond the Many Recessions
PIMCO Apr 15, 2020
Major economies are contracting, but extraordinary policy responses could limit severe recessions to this year.

Six Charts Show How COVID-19 Is an Unprecedented Threat to Development in Sub-Saharan Africa
IMF Apr 15, 2020
Sub-Saharan Africa is facing an unprecedented health and economic crisis. One that threatens to reverse the development progress of recent years. Furthermore, by exacting a heavy human toll, upending livelihoods, and damaging business and government balance sheets, the crisis threatens to slow the region's growth prospects for years to come.

Fiscal Policies to Contain the Damage from COVID-19
Vitor Gaspar, W. Raphael Lam, and Mehdi Raissi (IMF) Apr 15, 2020
Governments should do whatever it takes but make sure to keep the receipts.

Saving the Developing World from COVID-19
Mohamed A. El-Erian (Project Syndicate) Apr 15, 2020
The COVID-19 pandemic could devastate parts of the developing world. But with a concerted, cooperative, and holistic approach, the international community can avoid a large-scale humanitarian tragedy in vulnerable regions – and protect the rest of the world from destabilizing blowback.

One Contagion Is More Than Enough for India
Andy Mukherjee (Bloomberg View) Apr 15, 2020
The country faces a double blow from Covid-19 if financing isn't there for the recovery.

Brexit Is Back. Even Covid-19 Can't Stop It
Therese Raphael (Bloomberg View) Apr 15, 2020
Boris Johnson's popularity means he's likely to stay the course on seeking an EU trade deal this year, but he'll be keeping a careful eye on his polling.

Virus Recession Gives Economists a Shot at Redemption
Noah Smith (Bloomberg View) Apr 15, 2020
Devising policies that work might make up for the field's bungled response to the 2008 crisis.

Toward a European Reconstruction Fund
Guy Verhofstadt and Luis Garicano (Project Syndicate) Apr 15, 2020
Following a recent agreement by the Eurogroup of eurozone finance ministers on a COVID-19 rescue package, Europe is well positioned to maintain liquidity for the time being. But if it wants to avoid political infighting and set the stage for a post-pandemic recovery, it will need to go further.

Could Pandemic Lead to Famine?
Martin Ravallion (Project Syndicate) Apr 15, 2020
While the case for a sensible degree of social distancing to combat COVID-19 in developing countries is strong, the case for a lockdown is not. Lockdowns pose new threats, and could even turn the pandemic response into a famine in some poor places.

Debt Relief Is the Most Effective Pandemic Aid
Gordon Brown and Lawrence H. Summers (Project Syndicate) Apr 15, 2020
Just as the pandemic can be contained most effectively and least expensively with aggressive early action, the lesson from the past is that global recessions and their human costs are best addressed quickly and boldly. A two-year debt-payment moratorium for every emerging and developing economy that needs help would serve both goals.

Cushioning the Poor from the COVID-19 Shock
Rema N. Hanna and Benjamin A. Olken (Project Syndicate) Apr 15, 2020
Expanding social protection to reach vulnerable people quickly must be a pillar of every country's COVID-19 strategy. To achieve this, resource-constrained governments must look to past experience and existing research to design the most effective and efficient programs possible.

How Global Public Health Could Revive Multilateralism
Arancha González (Project Syndicate) Apr 15, 2020
In the fight against the COVID-19 pandemic, national responses are vital, but in the medium term, international cooperation will be our best weapon. And reforming and reinforcing the institutions and mechanisms that underpin such cooperation will be our best defense against future global threats.

Coronabonds: The forgotten history of European Community debt
Sebastian Horn, Josefin Meyer, and Christoph Trebesch (VoxEU) Apr 15, 2020
The introduction of European Coronabonds is sometimes described as an unprecedented step that would create a dangerous precedent of debt mutualisation. This column shows that this view is wrong and ignores the history of European financial cooperation. Since the 1970s, the European Commission has placed more than a dozen community bonds on private markets, which were guaranteed by the member states and distributed to countries in crisis. These bonds have been fully repaid in the past. Coronabonds with joint and several liability go a step further, but they would stand in a long tradition of European financial solidarity and cooperation.

Make room for fiscal action through debt conversion
Vesa Vihriälä (VoxEU) Apr 15, 2020
The high level of public debt in the euro area and doubts over debt sustainability in some member states mean that the fiscal expansion necessary to counter the Covid crisis will be challenging. This column argues for debt relief by the ECB that would allow all member states to finance the necessary fiscal measures in a normal fashion. While effectively forgiving past debt would create expectations that the same could happen again in the future, this moral hazard should be weighed against what is likely to happen without such relief.

Unintended effects of loan guarantees
Giorgio Gobbi, Francesco Palazzo, and Anatoli Segura (VoxEU) Apr 15, 2020
Most governments have introduced temporary credit guarantees to ensure banks can provide the liquidity needed by firms during the Covid-19 crisis. This column argues that these policies create incentives for banks to foreclose guaranteed loans maturing close to the expiration date of the guarantee scheme. This hidden effect is worse for firms whose debt is set to substantially increase during the pandemic. To avoid foreclosure 'waves' on the eve of the public guarantee termination, complementary measures that reduce firms' debt burden should also be adopted.

The COVID-19 Pandemic and the Fed's Response
Michael Fleming, Asani Sarkar, and Peter Van Tassel (FRBNY Liberty St Econ) Apr 15, 2020
The Federal Reserve is taking unprecedented actions to mitigate the effects of the COVID-19 pandemic on U.S. households and businesses. The authors briefly review the developments motivating these actions, summarize what the Fed has done and why, and compare the Fed's response to the pandemic with its response to the 2007-09 financial crisis.

After the Coronavirus, the Era of Small Government Will Be Over
James Traub (FP) Apr 15, 2020
The pandemic has put the state at the center of political life around the world. The aftermath will keep it there.

The Coronavirus Threatens Saudi Arabia's Global Ambitions
Krithika Varagur (FA) Apr 15, 2020
The Kingdom tallies the costs of the pandemic lockdown.

Too Soon? Pandemic Policy Response Raises Risk of Inflation
Chris Brightman (RA) Apr 15, 2020
The Fed's $5 trillion bazooka, helicopter drops of cash, and a tripling of deficits over the next two years imply a future bout of high and volatile inflation unless fiscal policy nimbly pivots to help prevent the toxic side effect of a spike in inflation. Is that expectation realistic?

Big US banks should raise $200bn in capital now
Neel Kashkari (FT) Apr 16, 2020
Biggest lenders must prepare for the worst to survive deep economic downturn, writes Fed official.

Why we should be selfish and provide Africa debt relief
David Pilling (FT) Apr 16, 2020
These governments desperately need financial breathing space to fight the pandemic.

The pandemic and the radical change in wealth distribution to come
Merryn Somerset Webb (FT) Apr 16, 2020
'The old globalised order is fracturing. We are seeing wartime-style falls in GDP'.

The Fed has cleared one big hurdle, but more loom
Gillian Tett (FT) Apr 16, 2020
It will be hard to help worthy US companies without also aiding private equity.

China GDP: Five things to watch after coronavirus
Tom Mitchell (FT) Apr 16, 2020
Analysts expect Beijing to unveil first year-on-year decline in more than four decades.

Coronavirus will awaken inflationary forces before year is out
Karen Ward (FT) Apr 16, 2020
Virus-induced deflation will soon fade, favouring stocks and inflation-linked bonds.

Straggling in a Good Economy, and Now Struggling in a Crisis
Patricia Cohen (NYT) Apr 16, 2020
The coronavirus pandemic has shown how close to the edge many Americans were living, with pay and benefits eroding even as corporate profits surged.

A Tale of Two Possible Recoveries
Greg Mankiw (NYT) Apr 16, 2020
An economist sees two divergent pathways after the current downturn. Which is more likely? He doesn't know, so here are both of them.

It's the End of the World Economy as We Know It
Neil Irwin (NYT) Apr 16, 2020
Experts suggest there will be "a rethink of how much any country wants to be reliant on any other country."

The Fed and Main Street
WSJ Apr 16, 2020
The central bank is setting itself up for a political backlash.

Main Street Needs More Fed Help
Glenn Hubbard and Hal Scott (WSJ) Apr 16, 2020
Right now, getting aid to small businesses is more important than protecting the Treasury's investment.

However big the next rescue package is, it won't be enough
Paul Waldman (WP) Apr 16, 2020
We keep repeating the same cycle of rescue packages that turn out to be too small.

Vietnam poised to be big post-pandemic winner
David Hutt (AT) Apr 16, 2020
Vietnam's 'coronavirus diplomacy' has lent an emergency helping hand to the West that will likely be rewarded in kind after the plague

Why oil prices will never recover
Michael Grubb (AT) Apr 16, 2020
Oil prices could wax and wane but will not rise above $30-40 a barrel for any sustained period ever again

Saudi-Russia Oil Price War — Paused, but Not Over
Rauf Mammadov (Brink) Apr 16, 2020
The April 12 OPEC+ deal to cut oil production that ended the disastrous five-week Saudi-Russia price war will not resolve the larger problem of oversupply in the oil market.

Economic Policy in Latin America and the Caribbean in the Time of COVID-19
Alejandro Werner (IMF) Apr 16, 2020
As of today, about 3,000 people have died from the COVID-19 virus in Latin America and the Caribbean. While the pandemic continues to spread across the region, countries are facing the worst economic recession since countries started producing national accounts statistics in the 1950s. The challenging external environment, coupled with much-needed measures to contain the pandemic, have led to a plummeting of economic activity across Latin America—where growth is poised to contract by 5.2 percent in 2020.

The G20 missed an opportunity to expand financial resources for vulnerable countries
Edwin M. Truman (PIIE) Apr 16, 2020
Despite the urgent need to help vulnerable countries cope with the COVID-19 pandemic, the G20 finance ministers and central bank governors issued a document on April 15, 2020, that contained many words and little new substance. They emphasized the importance of health response, aiding helpless countries, promoting recovery and financial stability, and mobilizing the International Monetary Fund (IMF), World Bank Group, and regional development banks. The only new element was conditional support for a "time-bound" suspension of debt service payments of the poorest countries.

Post-Pandemic Cities
Patricia Viel (Project Syndicate) Apr 16, 2020
COVID-19 is forcing cities around the world to face the reality that they're ill-prepared for emergencies. It's time to reinvent the modern urban center with an eye toward fully equipped health systems and state-of-the-art digital infrastructure that incorporates unanticipated risks.

COVID-19 Pandemic and the Asia-Pacific Region: Lowest Growth Since the 1960s
Chang Yong Rhee (IMF) Apr 16, 2020
This is a crisis like no other. It is worse than the Global Financial Crisis, and Asia is not immune. While there is huge uncertainty about 2020 growth prospects, and even more so about the 2021 outlook, the impact of the coronavirus on the region will—across the board—be severe and unprecedented.

A Phased Market Recovery as Liquidity and Fundamentals Return
Marc P. Seidner and Tiffany Wilding (PIMCO) Apr 16, 2020
Illiquidity and forced selling have already eased in high quality segments of the bond market, such as U.S. Treasuries and U.S. agency mortgage bonds. Over time, other sectors should reliquify and recover, although much will depend on the details and implementation of policy support, further government programs and the trajectory of economic recovery. In general, we believe the most resilient market sectors will stabilize well ahead of a recovery in the economy. But some segments – such as lower-quality unsecured corporate bonds and senior secured loans – could face real and permanent capital loss.

Some Wall Street Bankers Are Doing Well From This Crisis
Elisa Martinuzzi (Bloomberg View) Apr 16, 2020
Many Wall Street traders had their best first quarter in years amid the market meltdown, but the coming months might not be so profitable.

TSMC's Outlook Isn't the News You Were Hoping For
Tim Culpan (Bloomberg View) Apr 16, 2020
The chip giant beat some estimates but is slashing its industry growth forecasts, even under a rosy Covid-19 scenario.

The Coronavirus Will Make the Digital Divide Even Worse
Tyler Cowen (Bloomberg View) Apr 16, 2020
Technology is now essential to leading a normal life.

The Fog Surrounding the Coronavirus Economy
Clive Crook (Bloomberg View) Apr 16, 2020
The latest official projections are more pessimistic than those of private analysts.

Either Make More Babies or Embrace Foreign Workers
Daniel Moss (Bloomberg View) Apr 16, 2020
Asia's economies are increasingly reliant on foreign labor as populations shrink and age. The coronavirus puts that model to the test.

Pandemic Requires Comprehensive Debt Standstills
George Soros and Chris Canavan (Bloomberg View) Apr 16, 2020
Emerging-market economies must be allowed to defer all payments to international creditors — official and private — for at least one year.

Latin America Confronts the Coronavirus
Fernando Henrique Cardoso, Ricardo Lagos, Juan Manuel Santos, and Ernesto Zedillo (Project Syndicate) Apr 16, 2020
The challenge posed by the COVID-19 pandemic has no parallel in recent history. The world and the Latin American and Caribbean region cannot afford delayed or inadequate responses. Mutual trust, transparency, and reason – not populism or demagoguery – remain the best guideposts in these uncertain times.

The COVID crisis and productivity growth
Filippo di Mauro and Chad Syverson (VoxEU) Apr 16, 2020
The world went into the COVID crisis in the midst of a 15-year-long productivity growth slowdown. This column considers the channels through which the crisis might shift the growth rates of productivity and output. Globalisation, labour mobility and small firms may all fall victim to the crisis if the world does not succeed in reopening borders, refraining from trade and currency wars and focusing on policies to boost productivity. On the upside, the broad adoption of new technologies – such as IT skills during the epidemic – and strong reallocation pressures may provide an independent boost on productivity as we come out of the crisis.

Supply chains and intellectual property rights
Stefano Bolatto, Alireza Naghavi, Gianmarco Ottaviano, and Katja Zajc Kejžar (VoxEU) Apr 16, 2020
Contracting institutions have proved to be pivotal for supply chain organisation, and empirical evidence has shown that firms rely on outsourcing to deal with hold-up inefficiencies induced by contract incompleteness. For intangible assets, vertical integration is one strategy to prevent knowledge dissipation. This column presents new research that illustrates how firms organise their value chain and their 'knowledge' under imperfect protection of intellectual property rights. The results suggest that the quality of institutions protecting tangible and intangible assets may have opposite effects on organisational choices along the supply chain.

Work after COVID: A new regime for independent workers
Eduardo Levy Yeyati and Luca Sartorio (VoxEU) Apr 16, 2020
The policy tools being used to stabilise incomes during the COVID-19 lockdowns will provide job and payment protection for formal, salaried workers. But in the developing world, these workers account for only half of the labour force. This column looks at the other half: the 'independent' workers who have not only seen their incomes reduced, but who possess few of the benefits tied to jobs – from reliable hours to severance pay and social security. If disparities in labour markets go unaddressed, the pandemic will deepen the toll on poverty and inequality.

Propagation of the economic impact of lockdowns through supply chains
Hiroyasu Inoue and Yasuyuki Todo (VoxEU) Apr 16, 2020
Cities and regions around the world are in lockdown in an attempt to contain the spread of Covid-19. This column examines how the economic effect of the lockdown of a city can propagate to other regions in the country, focusing on the case of Tokyo. The findings suggest that if Tokyo were to be locked down for two weeks, the loss in value added production in the city would be 4.3 trillion yen, while the production loss in the rest of Japan due to propagation through supply chains would be 5 trillion yen. In addition, the effect on other regions becomes progressively larger as the duration of the lockdown grows.

Europe Needs an Alexander Hamilton, Not More Budget Hawks
Dalibor Rohac (FP) Apr 16, 2020
Without mutual debt in the form of Eurobonds, the continent's economic crisis will get worse, Euroskepticism will increase, and the EU could fall apart.

Oil Crisis Tests Putin's Skill to Project Strength
Thomas Graham (YaleGlobal) Apr 16, 2020
The Russian president orchestrated events to show he is in charge.

The World Goes Bust
Adam Tooze (LRB) Apr 16, 2020
It isn't a secret that China's debt bubble, Europe's divisions and America's irrational political culture pose a challenge to the functioning of what we know as the world economy. What caused the panic last month was the realisation that Covid-19 has exposed all three weaknesses simultaneously. Indeed, in Europe and the US the failure of government has been so severe that we now face a public health catastrophe and an economic disaster at the same time. And to make matters worse, Donald Trump appears tempted to juggle the two.

Shipwrecked
Adam Shatz (LRB) Apr 16, 2020
Covid-19 arrives at a moment when the 'global village' is a financial reality, but the faith that underpinned (or sanitised) it has crumbled. The interdependence of the village is a fact, but so are the cruel and immense disparities that allow it to run. The village's 'liberal' features, such as elections and a free press, are mostly a privilege – a vanishing one – of those who happen to live in Western Europe and North America. Now half the village is indoors, the skies are empty of aircraft and clearer than ever, and the entire system is 'on pause'.

Fed's junk bond purchases should be short-term
FT View Apr 17, 2020
Crisis-fighting measures need to be transparent and unwound quickly.

Emerging markets: debt or glory
Lex/FT Apr 17, 2020
Ignore credit default swaps, more scepticism towards EMs is needed.

China's GDP fall is a chance to ditch its national growth targets
Don Weinland (FT) Apr 17, 2020
Beijing's insistence on unrealistic goals has been a drag on the real economy.

Why we may have already seen the peak in oil demand
Mark Lewis (FT) Apr 17, 2020
A sooner-than-expected plateau in global consumption is a risk that can no longer be ignored.

Save globalisation to secure the future
Henry Paulson (FT) Apr 17, 2020
The world will be a very dangerous place if we do not fix multilateral institutions.

Beijing Pays a Coronavirus Price
WSJ Apr 17, 2020
The economy shrinks for the first time since the Cultural Revolution.

China fails to ease global 'depression' fears
Gordon Watts (AT) Apr 17, 2020
Economic numbers illustrate challenges ahead as the world's second-largest economy shrinks by nearly 7% in first quarter.

Depression, and not stagflation, could haunt China in 2020
Alicia García-Herrero (Bruegel) Apr 17, 2020
China's GDP in the first quarter of the year has surprised nobody but the devil is in the details. Local retail sales continued to fall in March (-16%), marginally better than during the peak of the Covid19 outbreak in January and February.

COVID-19: How far will global merchandise trade fall?
Gary Clyde Hufbauer and Zhiyao (Lucy) Lu (PIIE) Apr 17, 2020
The global recession resulting from the COVID-19 outbreak has already taken a toll on trade. How big the trade losses will be in the future is uncertain, but a decline is inevitable given the initial supply shock from China, followed by a demand shock from Europe and America, supply chain disruptions, and rising restrictions on trade of "essential" goods such as medical equipment and food. World Trade Organization (WTO) Director-General Roberto Azevêdo foresees an "ugly" year for global trade. Experience from the Great Recession of 2008–10 suggests the plunge in merchandise trade could be as large as 24 percent. Since all nations depend on trade, it is imperative that they cooperate to lower barriers, keep trade flowing, and foster a strong recovery once the public health crisis abates.

China's economic growth prospects are worse than during the global financial crisis
Nicholas R. Lardy and Tianlei Huang (PIIE) Apr 17, 2020
The latest economic data from Beijing for first quarter growth confirms the grim but perhaps unsurprising news that China has experienced the worst quarterly year-over-year decline in its GDP in history as a result of the COVID-19 pandemic. The 6.8 percent falloff was widely anticipated by forecasters but not as bad as some had predicted. The median forecast by economists polled by Reuters was -6.5 percent, and the largest forecast decline, by Capital Economics, was 16 percent. Nonetheless, the data show that China faces a greater challenge in recovering its economy than during the global financial crisis of 2008–10.

Central bank lending logistics in the war on COVID-19: A primer
Simon Potter (PIIE) Apr 17, 2020
Logistics including the quick adaptation of supply chains are critical to a war effort such as the fight against COVID-19. For central banks the basic supply chain is moving money with lightning speed to the correct location. To meet the demands of the battle, central banks are quickly assigning collateral with clear legal rights to the central bank as security for new lending. Frequently pricing the collateral, and assessing its underlying lendable value, is a crucial part of the process.

Treasury Market Liquidity during the COVID-19 Crisis
Michael Fleming and Francisco Ruela (FRBNY Liberty St Econ) Apr 17, 2020
A key objective of recent Federal Reserve policy actions is to address the deterioration in financial market functioning. In particular, the U.S. Treasury securities market has been the subject of concern and the venue for some of the Fed's initiatives. In this post, the authors evaluate a basic metric of market functioning for Treasury securities, market liquidity, through the first month of the Fed's extraordinary actions.

Stock Market Investors Are Too Optimistic
Marcus Ashworth (Bloomberg View) Apr 17, 2020
A 27% recovery in equities is surprising. We still have no idea of Covid-19's lasting impact on economic output.

Ford Shows Traders the Risk in Simply Following the Fed
Brian Chappatta and Brooke Sutherland (Bloomberg View) Apr 17, 2020
Double-digit bond yields are a reminder that any sort of outlook about corporate America remains murky, regardless of what the Fed is buying.

Big Government Is Bad for Productivity
Gary Shilling (Bloomberg View) Apr 17, 2020
Many citizens will no doubt find handouts more attractive than gainful employment.

China Won't Be Able to Bail Us Out This Time
Daniel Moss (Bloomberg View) Apr 17, 2020
During past crises, Beijing's largesse buoyed regional growth. Don't expect a repeat performance in this downturn.

How Africa Can Fight the Pandemic
Arkebe Oqubay (Project Syndicate) Apr 17, 2020
The response to Africa's COVID-19 plight must be swift and at scale rather than too little, too late. In a world short of progressive global leadership, where rules-based global governance is under threat, this is a chance for African and international policymakers to take decisive action.

A Post-COVID-19 Digital Bretton Woods
Rohinton P. Medhora and Taylor Owen (Project Syndicate) Apr 17, 2020
When world leaders came together in Bretton Woods, New Hampshire, in 1944, they laid the foundation for a model of global governance that would last for more than 70 years. To manage the far-reaching implications of digital technology and hyper-globalization, we must now pick up where they left off.

The art of central bank communication
Yosuke Takeda and Masayuki Keida (VoxEU) Apr 17, 2020
Communication strategies are increasingly seen as an important tool for central bankers to guide expectations. This column applies statistical natural language processing algorithms to press conferences given by two different governors of the Bank of Japan during a time without any formal changes in institutional arrangements for communication policy at the Bank. Communication strategies are found to differ vastly across the two governors, with one governor focusing on the topic of 'discretion' and the other on the topic of 'policy goals'.

Balancing corruption and exclusion: Incorporating India's Aadhaar into public food distribution
Karthik Muralidharan, Paul Niehaus, and Sandip Sukhtankar (VoxDev) Apr 17, 2020
Fighting corruption with India's new national ID system has cost some low-income households their benefits in the process.

Stable coins don't inflate crypto markets
Richard K Lyons and Ganesh Viswanath-Natraj (VoxEU) Apr 17, 2020
Does stable coin issuance have an inflationary effect on cryptocurrency prices such as Bitcoin? This column argues that aggregate stable coin issuance does not drive crypto prices, in contrast to claims from previous studies. Instead, it claims that issuance behaviour can be explained as maintaining a decentralised system of exchange rate pegs and acting as a safe haven in the digital asset economy. The latter can be demonstrated by the significant stable coin premiums during the COVID-19 panic of March 2020.

After Flattening the Curve, Austria Takes a Gamble
Denise Hruby (FP) Apr 17, 2020
Under political and public pressure, Austria has begun to reopen the economy. Will that backfire?

Mass Consumption Is What Ails Us
Sonia Shah (FA) Apr 17, 2020
To avoid pandemics, our whole economy needs to change.

International Growth Outlook Continues to Darken
Nick Bennenbroek, Brendan McKenna, and Jen Licis (WF) Apr 17, 2020
The global outlook is dominated by negative economic effects of efforts from governments around the world to stem the spread of the coronavirus, as well as low global oil prices. Against this bleak backdrop, we have reduced our GDP forecasts for the Eurozone, United Kingdom, Japan and Canada.

Quantifying the fiscal costs from corona virus
Sebastian Becker (DB Research) Apr 17, 2020
The German government has responded quickly and decisively to the economic fallout from the corona pandemic. Altogether, Germany's anti-crisis measures – consisting of extra spending, guarantees and loan/participation programs – sum up to an astronomic value of around EUR 1.9 bn (well above 50% of GDP in 2019). This gives the government huge scope to fight the pandemic and economic crisis. In this note we try to quantify Germany's fiscal costs from the corona crisis.

After the lockdown, another 'new normal'
FT View Apr 18, 2020
Without a Covid-19 vaccine life will not quickly snap back to how it was before.

Mind the gap between the markets and the real economy
Michael Mackenzie (FT) Apr 18, 2020
'Don't fight the Fed' maxim requires investors to ignore the pain of consumers and firms.

How to Survive the Coronavirus Markets
Jeff Sommer (NYT) Apr 18, 2020
One of the worst stretches in market history has included one of the most rapid stock rallies. How can investors get through this ordeal?

The economic crisis will expose a decade's worth of corporate fraud
Economist Apr 18, 2020
Downturns are corporate fraudsters' worst enemy.

Anatomy of the Crash
Tho Bishop (Mises Wire) Apr 18, 2020
"End the Fed!" Three small words became one of the most improbable and powerful political chants in modern politics thanks to the presidential campaigns of Dr. Ron Paul. With the backdrop of a global financial crisis, the congressman from Texas was able to use the microphone of modern politics, forever changed by the internet and social media, to wake up a generation of Americans to the threat posed by central banks and fiat money. Ideological gatekeepers in Washington and the corporate press found themselves forced to recognize and attack a previously obscure school of economic thought that was now being talked about by college students, activists, and even the odd politician.

Top Up This Small-Business Rescue Fund Now
Mohamed A. El-Erian (Bloomberg View) Apr 18, 2020
The Paycheck Protection Program is critical to battling Covid-19's impact on public and economic health.

Saudi Arabia Should Spend Like the Debtor It Is
David Fickling (Bloomberg View) Apr 18, 2020
The kingdom isn't what it used to be, but doesn't know it yet. Look at recent investments.

Don't Worry (Yet) About China Taking Over the World
Nisid Hajari (Bloomberg View) Apr 18, 2020
Its conduct on the coronavirus so far suggests a follower, not a leader—even as the U.S. has withdrawn.

Atlantic trade and the decline of conflict in Europe
Reshad N Ahsan, Laura Panza, and Yong Song (VoxEU) Apr 17, 2020
While the relationship between trade and war is ambiguous, some argue that diminished trade can pose a threat to global peace by lowering both the opportunity costs of war and the cost of raising an army. This column examines the relationship between Atlantic trade and war in Europe between 1640 and 1896, a period in which intra-European conflict decreased dramatically. It finds that the growth in Atlantic trade lowered the probability of intra-European conflict by 15 percentage points.

The importance of technology in banking during a crisis
Nicola Pierri and Yannick Timmer (VOxEU) Apr 18, 2020
Technology adoption in lending can enhance financial stability through the production of more resilient loans. Motivated by the recent surge of FinTech lending, this column analyses the implications of lenders' information technology adoption for financial stability. Banks that adopted IT more intensely before the Global Crisis were significantly more resilient when the shock hit. These banks had significantly fewer non-performing loans, and issued more loans during the crisis itself. Loan-level analysis indicates that high IT adoption banks issued mortgages with better performances and did not offload low-quality loans.

EU state aid policies in the time of COVID-19
Massimo Motta and Martin Peitz (VoxEU) Apr 18, 2020
State aid is essential to reduce long-run harm to the EU economy as a result of the Covid-19 crisis. However, non-harmonised programmes across EU member states generate serious risks to the functioning of markets, particularly if they go beyond short-term liquidity provision or employment support. This column suggests imposing strict conditions on state aid for recapitalisation of firms and argues in favour of an EU-wide programme for critical sectors. Such a programme would prevent harmful market distortions and maintain a level playing field for EU companies.

The corona spreads
Rui Esteves and Nathan Sussman (VoxEU) Apr 18, 2020
After an initial lull, financial markets reacted with a vengeance to the COVID-19 pandemic. Comparisons with 2008 are inevitable, but the ultimate impact on markets is still unclear. This column argues that the spread of the pandemic has little explanatory power over financial stress. Markets reacted as in any international financial crisis by penalising emerging economies (and countries without credible monetary anchors), exposing age-old vulnerabilities. This finding highlights the need for credible, but flexible, sovereign currencies and the need to build up liquidity reserves.

There Is No Panacea for the Coronavirus Economy
John Cassidy (New Yorker) Apr 18, 2020
Even under optimistic scenarios, restoring the economy to health is going to be an extended and difficult task.

How to secure the future of the eurozone
FT View Apr 19, 2020
Emmanuel Macron is right that without solidarity the single currency could fail.

Bailing out the oil industry brings a fate worse than death
Megan Greene (FT) Apr 19, 2020
Zombie companies would be created that must be kept afloat with taxpayer dollars.

The SDR is an idea whose time has come
Gavyn Davies (FT) Apr 19, 2020
An issue of new special drawing rights would help the world economy, if done correctly.

Bolsonaro, Brazil and the crisis in emerging markets
Jonathan Wheatley and Andres Schipani (FT) Apr 19, 2020
The country's struggle to cope with plunging commodity prices is complicated by political infighting.

Trump Opens Outer Space for Business
Taylor Dinerman and Glenn Harlan Reynolds (WSJ) Apr 19, 2020
An executive order and a prospective international agreement aim to make celestial mining an attractive investment.

Global brands must not abandon Bangladesh's factory workers in the coronavirus crisis
Rubana Huq (WP) Apr 19, 2020
The coronavirus has had devastating effects on Bangladesh's factory workers.

What It Looks Like When the World Stands Still
Julian Lee (Bloomberg View) Apr 19, 2020
With OPEC++ behind us, let's take a moment to marvel at just how completely our lives have come to a screeching halt.

Credit and trading behaviour: New evidence from the South Sea Bubble
Fabio Braggion, Rik Frehen, and Emiel Jerphanion (VoxEU) Apr 19, 2020
How does cheap credit feed into investors' behaviour? Cheap credit could boost stock prices, even without trading, by lowering the cost of capital. However, it might also enable naïve investors to ride a bubble and lose money. To see what effect prevails, this column collects every stock transaction for three major British companies during the 1720 South Sea Bubble. It finds that loan holders are more likely to buy following high returns, subscribe to overvalued share issues and incur large trading losses.

The legacy of financial crises: Lessons from Mexico
Gianluca Benigno, Andrew Foerster, Christopher Otrok, and Alessandro Rebucci (VoxEU) Apr 19, 2020
Borrowing constraints can amplify business cycle dynamics and create significant challenges for countries facing negative economic shocks. Based on a new estimated model of sudden stop crises, this column argues that financial crises are often followed by a quick but partial rebound. Thereafter, economies can experience a very protracted period of stagnation. A similar trajectory may be likely for the current COVID-19 crisis, as many countries will face financial frictions in responding to the economic downturn.

Covid-19 is bringing out protectionist instincts
FT View Apr 20, 2020
'Piracy' in obtaining vital supplies may rebound on those responsible.

The clean-up of the non-bank sector needs to begin now
Mark Sobel (FT) Apr 20, 2020
Financial system is failing its first real stress test after the 2008-09 crisis.

How coronavirus will reshape the trade fair industry
Michael Skapinker (FT) Apr 20, 2020
From Cannes to Shanghai, conferences are being called off. What will the market look like when it returns?

Argentina's creditors must face up to the coronavirus challenge
Kevin P. Gallagher (FT) Apr 20, 2020
Now is not the time to be starving a country of capital.

How coronavirus brought aerospace down to earth
Peggy Hollinger (FT) Apr 20, 2020
The industry has been one of the hardest hit, with contracts cancelled, production halted and pleas for big bailouts.

Argentina's creditors must face up to the coronavirus challenge
Kevin P. Gallagher (FT) Apr 21, 2020
Now is not the time to be starving a country of capital.

Conventional economic wisdom may fail Japan
Gregory Clark (AT) Apr 20, 2020
As Covid-19 risks ravaging its economy, Japan needs to think out of the box.

Too Much Oil: How a Barrel Came to Be Worth Less Than Nothing
Stanley Reed and Clifford Krauss (NYT) Apr 20, 2020
One oil price went negative on Monday, signaling that there is no place to store all the crude the world is producing but not using.

We Need a More Resilient American Economy
Marco Rubio (NYT) Apr 20, 2020
With a sensible industrial policy, workers will take precedence over short-term corporate gain.

Care to Store Some Oil?
WSJ Apr 20, 2020
The real price of West Texas crude hasn't fallen below $0.

Americans Need Forbearance, Not More Stimulus
Peter J. Wallison (WSJ) Apr 20, 2020
Congress and the Fed should make it possible to pay off obligations later, at a special interest rate.

The Coronavirus Hits the Global South
Walter Russell Mead (WSJ) Apr 20, 2020
Even more than developed nations, the world's poor will need faster economic growth to recover from the pandemic.

Coronavirus Is Changing Global Supply Chains in Unexpected Ways
Richard Wilding (Brink) Apr 20, 2020
One of the lasting impacts of the COVID-19 crisis is likely to be an acceleration toward the automation of systems and near-shoring. We may see shorter, simpler supply chains with new levels of resilience built in — as well as new levels of adaptability in strategy and management. It is important for companies to be flexible moving forward.

How Badly Will the Coronavirus Impact Africa's Economies?
Yohannis Mulu Tessema and John Osei (Brink) Apr 20, 2020
COVID-19, if not contained, can have long-lasting effects on all sectors of the African economy in addition to the loss of human life. Some leading predictions indicate that the best scenario Africa can hope for now is a global economic recession comparable to the level of 2008 financial crisis.

Pandemic loans to firms: Postponing the evil day?
Patrick Honohan (PIIE) Apr 20, 2020
Governments around the world are providing financial support to firms hit by the pandemic shutdowns, with the aim of limiting job losses and preventing closure of fundamentally viable businesses. But the financial instruments they are using for much of this support are likely to leave beneficiary firms overindebted when the pandemic crisis has passed. Governments should, therefore, consider alternatives.

A Global Crisis Like No Other Needs a Global Response Like No Other
Kristalina Georgieva (IMF) Apr 20, 2020
I have been saying for a while that this is a "crisis like no other." It is: More complex, with interlinked shocks to our health and our economies that have brought our way of life to an almost complete stop; more uncertain, as we are learning only gradually how to treat the novel virus, make containment most effective, and restart our economies; and truly global. Pandemics don't respect borders, neither do the economic shocks they cause.

A policy framework for mitigating the economic impact of COVID-19
Ivailo Izvorski, Sandeep Mahajan, Lalita Moorty, and Gallina A. Vincelette (Brookings) Apr 20, 2020
COVID-19 is a unique, severe. and unprecedented health and economic crisis that is changing our lives. Three things make it unique. First, it is a rolling combination of a health pandemic and an economic crisis. Second, the crisis has turned global in record time. Third, it is both a demand and supply side shock to all the major economies. The damage caused by the virus and the policy responses it requires are deep and multifaceted. Its effects can be grouped into three categories.

Coronavirus Reverses Brazil's Economic Revolution
Mac Margolis (Bloomberg view) Apr 20, 2020
Free marketeer Paulo Guedes discovers Mike Tyson's truth: "Everybody has a plan until they get punched in the mouth."

Erdogan Should Break His IMF Taboo
Bobby Ghosh (Bloomberg view) Apr 20, 2020
The coronavirus pandemic gives Turkey's president a face-saving way to ask for help.

Monetary Finance Is Here
Adair Turner (Project Syndicate) Apr 20, 2020
There is no doubt that monetary finance is technically feasible and that wise fiscal and monetary authorities could choose just the "right" amount. The crucial issue is whether politicians can be trusted to be wise.

Solidarity Is Not What Europe Needs
Yanis Varoufakis (Project Syndicate) Apr 20, 2020
As the COVID-19 outbreak in Europe worsened, the leaders of nine eurozone countries called for the issuance of "coronabonds" to help spread more evenly the additional debt governments would incur as they struggled to replace disappearing private incomes. But while the idea is sound, it was doomed by its proponents' justification.

The EU Should Issue Perpetual Bonds
George Soros (Project Syndicate) Apr 20, 2020
The disruption in the European Union caused by the COVID-19 pandemic should be temporary, but only if EU leaders take the extraordinary measures needed to avoid long-term damage. Fortunately, there is an easy, fast and low-cost way to finance the proposed €1 trillion European Recovery Fund.

Innovation in the Pandemic Age
Zhu Min (Project Syndicate) Apr 20, 2020
Lockdowns cannot last forever, and COVID-19 is unlikely to disappear on its own. The world must leverage its collective resources to harness the power of science, innovation, and markets to devise a more sustainable solution – namely, a cure or a vaccine.

The Myth of "Helicopter Money"
Yeva Nersisyan and L. Randall Wray (Project Syndicate) Apr 20, 2020
Since the United States adopted a $2.1 trillion rescue package to complement unprecedented action by the US Federal Reserve in response to the COVID-19 crisis, the media have been amplifying popular misconceptions about Modern Monetary Theory. So, what does MMT actually say about financing government borrowing and spending?

How Europe Rules the Digital Economy
Anu Bradford (Project Syndicate) Apr 20, 2020
Europe is not home to any of the major tech firms, but it shapes digital governance worldwide, owing to the size and attractiveness of its market. Whereas American-style techno-libertarianism and Chinese digital authoritarianism have both come up short, the European Union's regulatory approach has emerged as a global gold standard.

Empowering Africa's Digital Entrepreneurs
Perseus Mlambo and Lydia Chiseche Ngoma (Project Syndicate) Apr 20, 2020
The Fourth Industrial Revolution is here, and if African economies are to flourish, they must adjust accordingly. For governments, that means creating the conditions for private-sector innovation and entrepreneurship

International tax avoidance and development
Ludvig Wier (VoxDev) Apr 20, 2020
Corporate taxation is at the heart of economic development, and cardiac failure looms if international tax reform is not made globally inclusive

Mitigating COVID-19 panic buying: Lessons from historical financial crises
Kilian Rieder (VoxEU) Apr 20, 2020
Since mid-March 2020, countries have seen consumers panic buying large quantities of groceries in reaction to the COVID-19 pandemic. Why does panic buying arise and how may one mitigate its negative consequences? This column examines the Bank of England's response to financial crises during the 19th century and suggests that a key action is to counter those incentives that turn panic buying into a rational strategy.

Repair and reconstruct: A Recovery Initiative
Agnès Bénassy-Quéré, Ramon Marimon, Philippe Martin, Jean Pisani-Ferry, Lucrezia Reichlin, Dirk Schoenmaker, and Beatrice Weder di Mauro (VoxEU) Apr 20, 2020
The EU has been slow to formulate its response to the Covid crisis. Fortunately, things have started to change. The EU's leaders should finish work on the new borrowing facilities, first by clarifying the maturities of the borrowings, and second by being prepared to beef up their amounts if needed. It is also crucial to find ways to jointly finance priority action and to provide support to countries worst affected by the crisis in order to restart their own economies. The objective of a Recovery Initiative should be to repair and reconstruct the EU economy: to repair corporate balance sheets and value chains; and to reconstruct the economy on a new, sustainable basis through investment in common public goods such as research, resilience, and the greening of the economy. This will involve targeted investment, coordinated restructuring in some sectors, and the introduction of an equity fund to help SMEs survive the crisis.

The growth of non-bank finance and new monetary policy tools
Adrien d'Avernas, Quentin Vandeweyer, and Matthieu Darracq Pariès (VoxEU) Apr 20, 2020
How does the presence of 'shadow banks' – non-bank, unregulated financial intermediaries – affect the ability of central banks to tackle a liquidity crisis? To address this question, this column develop an asset pricing model with both bank and non-bank financial institutions. A crucial part of the model is that banks intermediate liquidity between the central bank and non-banks, but this intermediation stops during a financial crisis. Non-banks are then left without a lender of last resort, and central bank liquidity operations with banks are not sufficient to mitigate the crisis. In the stylised model, opening liquidity facilities to non-banks and purchasing illiquid assets are then essential measures to tackle a liquidity crisis.

The impact of the COVID-19 crisis on the equilibrium interest rate
Gavin Goy and Jan Willem van den End (VoxEU) Apr 20, 2020
The lockdown of economies during the COVID-19 crisis creates conditions in which private sector demand may fall unboundedly while precautionary savings increase. This column argues that the crisis will push down the equilibrium real interest rate further, which has been trending down since the 1980s. However, higher government spending to combat the crisis could counter this trend. The overall effect on the equilibrium interest rate will depend partly on the extent to which the increasing public debt can provide the private sector with a safe asset for holding precautionary savings.

Monetary policy in oil-exporting countries
Rabah Arezki (VoxEU) Apr 20, 2020
COVID-19 will precipitate 'peak demand' for oil with dramatic consequences on oil-exporting countries in the short and medium run. This column provides a perspective on the role of monetary policy in these countries at different horizons. In the short run, (independent) monetary policy should flexibly target inflation. In the medium run, central banks need to coordinate with fiscal authorities to ensure that monetary policy operates around a credible and sustainable fiscal anchor. In the long run, central banks should beware of the existential threats posed by new risks related to stranded assets.

The impact of the COVID-19 crisis on the equilibrium interest rate
Gavin Goy and Jan Willem van den End (VoxEU) Apr 20, 2020
The lockdown of economies during the COVID-19 crisis creates conditions in which private sector demand may fall unboundedly while precautionary savings increase. This column argues that the crisis will push down the equilibrium real interest rate further, which has been trending down since the 1980s. However, higher government spending to combat the crisis could counter this trend. The overall effect on the equilibrium interest rate will depend partly on the extent to which the increasing public debt can provide the private sector with a safe asset for holding precautionary savings.

Shock dependence of exchange rate pass-through
Mariarosaria Comunale (VoxEU) Apr 20, 2020
The concept of shock dependency of the pass-through emerged from an understanding that exchange rate movements, driven by different shocks, can have different effects on prices. This column attempts to shed a light on shock-dependent exchange rate pass-through for the euro area and its member states by drawing comparisons and looking at the robust results across the available structural empirical frameworks and theoretical models. It finds that different domestic and global shocks can be associated with widely different pass-throughs, but these are similar across models, with the largest value experienced in the case of monetary policy shocks.

The Price of the Coronavirus Pandemic
Nick Paumgarten (New Yorker) Apr 20, 2020
When COVID-19 recedes, it will leave behind a severe economic crisis. But, as always, some people will profit.

Fiscal Fallout from the COVID-19 Pandemic: Part I
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Apr 20, 2020
In this report, the first in an upcoming series, we analyze the tax and spending changes necessary to stabilize/reduce the debt-to-GDP ratio of the federal government in coming years.

April Flashlight for FOMC Blackout Period
Jay H. Bryson, Tim Quinlan, Zachary Griffiths, and Michael Pugliese (WF) Apr 20, 2020
We have now entered the blackout period during which Fed policymakers refrain from public comment ahead of the next Federal Open Market Committee meeting on April 29. This report recaps what the Fed has already done and examines what could possibly be left in its toolkit to put to work amid the pandemic that is causing the U.S. economy to tumble into a deep but, hopefully, short recession.

Poor countries need latitude from creditors
FT View Apr 21, 2020
More needs to be done to help developing world fight virus and avoid economic collapse.

Coronavirus should focus the minds of Asia's entrepreneurs
Chris Razook (FT) Apr 21, 2020
There has never been a more crucial time for start-ups to get to grips with governance.

IMF's $1tn lending power is not all it is cracked up to be
David Lubin (FT) Apr 21, 2020
The organisation's response to the Covid-19 crisis is hamstrung by its conditions.

Investing in times of uncertainty
Simon Edelsten (FT) Apr 21, 2020
Investors must consider the lessons of past downturns as they look to the future.

Automation anxiety will only increase
Carl Benedikt Frey (FT) Apr 21, 2020
Consumers may prefer automated services to face-to-face interactions for some time to come.

The collapse in oil is a wake-up call for stock markets
Katie Martin (FT) Apr 21, 2020
Any idea that economies are through the worst of coronavirus seems misplaced.

Oil prices went negative. Here's what that means long-term.
Megan McArdle (WP) Apr 21, 2020
With the country's new routine, things are getting a little weird.

Can I interest you in thousands of barrels of oil?
Alexandra Petri (WP) Apr 21, 2020
You are rich in something that I am not: not having oil.

Could the pandemic help push the oil industry into irrelevance?
Francisco Toro (WP) Apr 21, 2020
Renewable energy technology, already competitive with oil, might soon simply leave fossil fuels behind.

China goes on a discount oil buying binge
Tim Daiss (AT) Apr 21, 2020
China is stockpiling cheap oil to build up its strategic reserves but it's still not clear fast-falling prices have hit the bottom.

Saving Africa is in the world's self interest
Brian Caplen (Banker) Apr 21, 2020
Failure to come up with a package to help Africa through the Covid 19 pandemic will condemn everyone to a second or third wave of the disease, writes Brian Caplen.

As Oil Crashes, Iron Ore's Still Rocking
Clara Ferreira Marques (Bloomberg view) Apr 21, 2020
China's return to work may give the commodity, and Australian miners such as BHP, another year of grace.

Protect Banks, Not Their Shareholders
Natasha Sarin (Bloomberg view) Apr 21, 2020
An automatic dividend ban would make the financial system stronger.

Haphazard Reopening Risks Public Health and Economy
Mohamed A. El-Erian (Bloomberg view) Apr 21, 2020
A stop-go-stop pattern might work, but it would more likely be a medical and business setback.

Markets Can't Ignore an Event This Extreme
John Authers (Bloomberg view) Apr 21, 2020
Negative oil prices are more evidence of a broken global financial order.

Trump Can't Save Oil Prices With Saudi Import Ban
Julian Lee (Bloomberg view) Apr 21, 2020
About 40 million barrels of Saudi oil are sailing for U.S. ports, and stopping them won't do much good.

Shelter from the Middle East's Perfect Storm
Bassem Awadallah and Adeel Malik (Project Syndicate) Apr 21, 2020
The COVID-19 pandemic threatens every region in the world, none more so than the Middle East. With oil prices plummeting and public-health costs poised to skyrocket, the Arab world must use this tragic occasion to forge a new cooperative regional order.

The New Digital-Payments Race
Huw van Steenis (Project Syndicate) Apr 21, 2020
In the classic account of technological disruption, small, flexible upstarts topple large, plodding incumbents because the latter fail to grasp the radical implications of innovations. But in the case of payments systems, central banks are not typical incumbents, and are more likely to facilitate the revolution than be devoured by it.

Externalities in international tax enforcement
Thomas Tørsløv, Ludvig Wier, and Gabriel Zucman (VoxEU) Apr 21, 2020
Despite the legal frameworks and large amounts of lost tax revenue, profit-shifting practices persist around the world. This column argues that fiscal authorities of high-tax countries face an incentive problem in combatting profit shifting to tax havens. Enforcement efforts are focused on relocating profits booked in other high-tax countries rather than those in tax havens. This can ultimately result in lower global tax payments of multinational companies. The results call for a global corporate tax reform in order to save resources that currently go to wasteful and inconsequential tax enforcement.

Coronavirus from the perspective of 17th century plague
Neil Cummins, Morgan Kelly and Cormac Ó Gráda (VoxEU) Apr 21, 2020
Between 1563 and 1665, London experienced four plagues that each killed one fifth of the city's inhabitants. This column uses 790,000 burial records to track the plagues that recurred across London (epidemics typically endured for six months). Possibly carried and spread by body lice, plague always originated in the poorest parishes; self-segregation by the affluent gradually halved their death rate compared with poorer Londoners. The population rebounded within two years, as new migrants arrived in the city "to fill dead men's shoes".

A perfect storm: COVID-19 in emerging economies
Constantino Hevia and Pablo Andrés Neumeyer (VoxEU) Apr 21, 2020
Emerging economies must navigate the COVID-19 pandemic amid collapsing exports, dwindling remittances and tightening international credit conditions. This column argues that developing countries will be harder hit by the pandemic as many policy measures to fight it will be less effective. One important reason is that their governments will have difficulties to issue debt to smooth the COVID-19 shock as they struggle to credibly commit future tax revenues to pay for a fiscal expansion today. Given this, it is vital that economists and epidemiologists work together on coordinated health and economic policy responses to COVID-19 designed for developing countries.

The European response to the Covid-19 crisis: A pragmatic proposal
Roberto Perotti (VoxEU) Apr 21, 2020
In response to the pandemic, several proposals have been advanced to mobilise large amounts at the European level, mostly to address the needs of periphery countries. This column argues that because these proposals do not take into account the preoccupations of core countries, the outcome is likely to be general disappointment and recriminations. It offers an alternative proposal, based on the notion that periphery countries are much better equipped to make it on their own than is commonly thought, with a little help from the ECB.

A debt standstill for COVID-19 in low- and middle-income countries
Patrick Bolton, Lee Buchheit, Pierre-Olivier Gourinchas, Mitu Gulati, Chang-Tai Hsieh, Ugo Panizza, and Beatrice Weder di Mauro (VoxEU) Apr 21, 2020
Many low- and middle-income countries may face problems servicing their external debts while addressing the COVID-19 emergency. Urgent action is needed to prevent disorderly defaults and litigations. This column presents a mechanism to implement a debt standstill which would free significant resources to cover some of the most immediate costs of the COVID-19 crisis.

COVID-19: Turning Point for Globalization?
Hans Yue Zhu (YaleGlobal) Apr 21, 2020
Weakened global institutions and leaders who reject scientific advice, not globalization, are culprits of the COVID-19 pandemic

The Coronavirus Could Upend Trump's China Trade Deal
Jack Detsch and Robbie Gramer (FP) Apr 21, 2020
Bleak data on China's economic outlook counters claims by Trump officials that the U.S. economy can get quickly back on track when the lockdown lifts.

Oil Price Nosedive Continues as Trump's Deal Fails to Deliver
Keith Johnson (FP) Apr 21, 2020
The impact of the coronavirus sends markets into an unprecedented slump, with no end in sight.

There's No Such Thing as Good Liberal Hegemony
Stephen M. Walt (FP) Apr 21, 2020
It's not just that the United States has made mistakes—the very idea of U.S. global leadership is broken from the ground up.

Monthly Probability Suggests Recession Began in March
Azhar Iqbal (WF) Apr 21, 2020
Our recession probability models hit a ceiling in March, suggesting it may be the starting month of the recession. Our economic activity index also hit the lowest level in the post-Great Recession era.

Modernizing the World Trade Organization
Various (CIGI) Apr 21, 2020
The World Trade Organization (WTO) is experiencing a crisis of legitimacy — trade wars rage on and the Appellate Body is unable to function. In this essay series, authors examine where the WTO is falling short, consider the opportunities that lie ahead and discuss options for a modernized WTO.

Spain's proposed recovery fund has irrefutable merits
Martin Sandbu (FT) Apr 22, 2020
If there is going to be a common European fiscal response to the crisis, this is the form it should take.

Coronavirus crisis may finally prove that 'Japan Inc' does not exist
Leo Lewis (FT) Apr 22, 2020
Three months on from the country's first officially recorded case, the 'all Japan' corporate instinct has not noticeably kicked in.

Looking for M&A deals is risky now for both buyers and sellers
Brooke Masters (FT) Apr 22, 2020
Smaller deals and sectors less affected by the coronavirus crisis are likely to bounce back first

All that drama about fixed-income ETFs was overplayed
Robin Wigglesworth (FT) Apr 22, 2020
Exchange traded funds holding bonds played a key role in easing March turmoil.

Russia's oligarchs expected to dig deep during the crisis
Henry Foy (FT) Apr 22, 2020
The dynamics of Putin's regime puts onus on big business to help the state in troubled times.

India cannot simply spend its way out of a crisis
Duvvuri Subbarao (FT) Apr 22, 2020
Unfortunately, no emerging economy can take the generosity of markets for granted.

Don't repeat the mistakes of the Greek bailout
George Papaconstantinou (FT) Apr 22, 2020
The EU does not have the luxury of time or compromises anchored in old beliefs.

Covid-19 could detonate a 'hunger pandemic.' With millions at risk, the world must act.
David M. Beasley (WP) Apr 22, 2020
Analysis by the World Food Program shows that 300,000 could starve to death every single day for the next three months.

Covid-19 Threatens Global Safety Net
NYT Apr 22, 2020
Developing nations will need help with the economic and public health disruptions from coronavirus. But institutions designed to help are being hobbled.

'Instead of Coronavirus, the Hunger Will Kill Us.' A Global Food Crisis Looms.
Abdi Latif Dahir (NYT) Apr 22, 2020
The world has never faced a hunger emergency like this, experts say. It could double the number of people facing acute hunger to 265 million by the end of this year.

The Short-term Liquidity Line: A New IMF Tool to Help in the Crisis
Geoffrey Okamoto (IMF) Apr 22, 2020
The COVID-19 pandemic has severely disrupted the global economy at every level. Across the world, financial conditions have tightened dramatically, with unprecedented portfolio outflows from emerging markets in terms of both size (a record of about $100 billion) and speed, and markets effectively frozen in some cases. This has created sizable demand for U.S. dollar liquidity, with emerging markets facing sharp liquidity shortages.

Central Banks and the Next Crisis: From Deflation to Stagflation
Daniel Lacalle (Mises Wire) Apr 22, 2020
When governments and central banks announce massive stimulus packages at the very beginning of a crisis, they bet on a speedy recovery and a return to normal as if nothing had happened. This is far from the case.

In China's economic shock, online retail sales are prospering
Eva (Yiwen) Zhang and Yi Ji (PIIE) Apr 22, 2020
As China staggers through its worst economic shock in modern history, retail sales have been especially hard hit, dropping 19 percent in the first quarter of 2020.[1] Yet online sales of physical goods have grown by 6 percent during the lockdown imposed to combat the COVID-19 virus outbreak.

COVID 19 and the Marshall Plan Illusion
Denis MacShane (Globalist) Apr 22, 2020
Why the Marshall Plan would be turned down by today's European leaders.

EU debt as insurance against catastrophic events in the euro area: the key questions and some answers
Guntram B. Wolff (Bruegel) Apr 22, 2020
European Union debt can provide comprehensive insurance against the COVID-19 pandemic and can enable a macroeconomic response, even though EU debt is a liability for taxpayers in EU countries and therefore indirectly for national budgets. To establish it, countries will need to give up control over some spending and some revenues. To be politically sustainable, that control should not be intergovernmental but be grounded in EU institutions. The EU Treaty offers some possibilities, but treaty change might ultimately be necessary. Democratic legitimacy is at the core of the debate.

How Would Rapid Growth in the Poorest Countries Affect Global Carbon Emissions?
Arthur Baker and Ian Mitchell (CGD) Apr 22, 2020
If the 52 poorest countries in the world—home to a rising population of 1.4 billion people—grow their economies rapidly, how much will they contribute to global carbon emissions in 2030? And how important will this be in our fight against climate change?

Facts, not words: the EU role in the de-confinement phase
Jean Pisani-Ferry (Bruegel) Apr 22, 2020
The EU should be modest, but not shy. As far as public health is concerned, it is not in the driving seat and there is no reason to pretend it should be. But in connection to research on treatments and vaccines, it has a vital role to play in the collection and dissemination of accurate information on the development of the pandemic. In a situation dominated by fear and uncertainty, information is an essential ingredient for rebuilding trust, for creating the conditions for the gradual reopening of borders and for paving the way for common initiatives and policies. This is not something that member states will do by themselves. They need the EU to step in quickly.

China's Factories Are Slowly Waking Up
Ben Schott (Bloomberg view) Apr 22, 2020
The bad news: Pollution levels are increasing. The good news: That means economic activity is, too.

Germany Has a Winning Hand Again in Europe
Ferdinando Giugliano (Bloomberg view) Apr 22, 2020
Even Italy is softening its position on coronabonds ahead of the EU leader's meeting this week. No country has the appetite for a dramatic showdown.

how Bad Might It Get? Think the Great Depression
Noah Smith (Bloomberg view) Apr 22, 2020
The coronavirus collapse has the ingredients to surpass the disaster of the 1930s.

Thinking Big About Covid-19 and Monetizing Public Debt
Andy Mukherjee (Bloomberg view) Apr 22, 2020
India can show the way to be smart, not coy, on rolling back decades of inflation-era dogma.

The ECB Prepares the Way for Buying Junk Bonds
Marcus Ashworth (Bloomberg view) Apr 22, 2020
The central bank is accepting non-investment grade debt as collateral. Why not follow the Fed and buy higher-quality junk bonds too?

Spain Is Leading the Way on Perpetual Bonds
George Soros (Project Syndicate) Apr 22, 2020
When the European Council's virtual summit convenes on April 23 to address how the European Union should cope with the economic fallout of the COVID-19 pandemic, it should consider the Spanish government's submission carefully. Indeed, it should be the first item on the meeting's agenda.

The Trade Cure for the Global Economy
Victor K. Fung (Project Syndicate) Apr 22, 2020
As world leaders work to revitalize multilateralism to confront the COVID-19 crisis, they must also reshape it in a way that recognizes and reflects the many dimensions of global interdependency. This means, first and foremost, ensuring an open and sustainable global trading system.

How Aging Societies Should Respond to Pandemics
Andrew Scott (Project Syndicate) Apr 22, 2020
Whereas just over 2.5% of the US population was over 70 in 1920, that share is now more than 10%. This shift has major implications for how the coronavirus spreads, how many people will die, and how we should respond to this and future pandemics.

COVID-19 and the Trust Deficit
Michael Spence and David W. Brady (Project Syndicate) Apr 22, 2020
Years of polling in the United States and Europe show that public confidence in institutions has been falling, fueling partisan polarization and political paralysis. But now that the COVID-19 pandemic has left us with no choice but to rely on our institutions, the question of whether trust can be restored has become paramount.

Why Libra Matters
Dante Alighieri Disparte (Project Syndicate) Apr 22, 2020
Since Facebook launched Libra, a not-for-profit initiative to create a digital currency and global payments system, there has been much hand-wringing over the potential risks posed by digital disruption in the financial sector. But not nearly enough has been said about the dangers associated with the status quo.

Alice in Libraland
Barry Eichengreen (Project Syndicate) Apr 22, 2020
The reaction in June 2019 to the announcement of Facebook's planned "stablecoin" was immediate and almost universally negative, owing both to the half-baked quality of the proposal and negative perceptions of the parent company. But while neither problem has been fixed, it may no longer matter: central banks and other more experienced private entities are taking the digital-payments baton.

Covid-19: Employment in middle-income economies
Zsoka Koczan and Alexander Plekhanov (VoxEU) Apr 22, 2020
While flexible labour markets normally facilitate economic adjustment during crises, recent Google search data suggest that the widespread Covid-19 lockdowns may impede this adjustment process. This column explores how labour market structures may determine how employment levels across middle-income countries are affected by the shock. The impending job and income losses are likely to be most severe where fewer people have permanent contracts, where many are self-employed, and where more people work for small firms and in retail. In the long term, these asymmetric impacts may further increase the demand for public-sector jobs.

A Corona financial solidarity levy
Daniel Gros (VoxEU) Apr 22, 2020
Consensus is forming in Europe that a united response to the coronavirus crisis is needed. Multiple proposals for a 'solidarity fund' have been made, along with suggestions for how to finance it. This column argues that a one-time EU-wide levy on financial assets could raise €300-400 billion, and thus finance a European Solidarity Fund. This levy would be non-distortionary, could be implemented quickly through financial intermediaries, and would avoid the need for controversial Coronabonds.

Monetary policy and regional inequality
Sebastian Hauptmeier, Fédéric Holm-Hadulla, and Katerina Nikalexi (VoxEU) Apr 22, 2020
In many parts of the world, the economic fortunes of poorer and richer regions have drifted apart over recent years, triggering debate on how to explain and address this trend. This column adds a further angle to this debate: the link between monetary policy and regional inequality. Using data on economic activity at the city and county level in Europe, it documents pronounced heterogeneity in the regional patterns of monetary policy transmission. As a consequence of this heterogeneity, monetary policy tightening aggravates regional inequality and policy easing mitigates it. The COVID-19 crisis may temporarily reinforce regional inequality.

Fiscal Fallout from the COVID-19 Pandemic: Part II
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Apr 22, 2020
In the second report of a three-part series on the outlook for federal government debt in the wake of the COVID-19 pandemic, we analyze how lower interest rates and stronger nominal GDP growth would affect the fiscal outlook over the next ten years.

Covid-19 is resetting the way we talk about the economy
Wendy Carlin (FT) Apr 23, 2020
The twin crises of climate change and the pandemic provide an opportunity to transform thinking.

Governments should backstop trade credit
Claire Jones (FT) Apr 23, 2020
As corporate insolvencies soar and firms try to hang on to their cash as long as possible, expect to hear a lot more about trade credit insurance.

It is hard to pick any winners from oil's collapse
Helima Croft (FT) Apr 23, 2020
The US and other producers are more codependent than recent years suggest.

Big Oil to the Coronavirus Rescue
WSJ Apr 23, 2020
Look whose products are crucial for fighting off Covid-19.

Get Ready for the Return of Inflation
Tim Congdon (WSJ) Apr 23, 2020
Fed actions have increased the quantity of money in the U.S. economy at a blistering rate.

After the disease, the debt
Economist Apr 23, 2020
To cope with the expensive legacy of the pandemic, governments will have to find the right path between stimulus and restraint.

The pandemic will leave the rich world deep in debt, and force some hard choices
Economist Apr 23, 2020
Who takes the pain, and can there be gain.

The Death of Globalization? COVID 19 and the Nation-State
Michael Zürn (Globalist) Apr 23, 2020
The temptation to forecast the end of globalization is large, but very premature.

A Post-Coronavirus Recovery in Asia—Extending a "Whatever it Takes" Lifeline to Small Businesses
Kenneth Kang and Changyong Rhee (IMF) Apr 23, 2020
Asia was hit hard by the first wave of the coronavirus, as the sudden stop in activity struck households and firms simultaneously—first in China, then elsewhere in Asia, and now globally. Policymakers responded swiftly with aggressive spending to support the medical response and vulnerable households and firms. And central banks took swift actions to expand liquidity.

The pandemic adds momentum to the deglobalization trend
Douglas A. Irwin (PIIE) Apr 23, 2020
The COVID-19 pandemic is driving the world economy to retreat from global economic integration. Policymakers and business leaders are now questioning whether global supply chains have been stretched too far. In an environment where alliances are uncertain and international cooperation is absent, they are also asking whether they should reduce their economic interdependence. National security and public health concerns are providing new rationales for protectionism, especially for medical gear and food, and an emphasis on domestic sourcing.

there Is No Looming U.S. Debt Crisis
Karl W. Smith (Bloomberg view) Apr 23, 2020
America has unique advantages that allow it to borrow more money than other nations.

Think Oil Price Volatility Is Over? Think Again
David Fickling (Bloomberg view) Apr 23, 2020
There's a bigger problem lurking in the market than the price of WTI.

Emerging Markets May Lead the Coronavirus Rebound
John Authers (Bloomberg view) Apr 23, 2020
That's what happened the last time oil reached a bottom below $20 per barrel.

What Saudi Arabia Can Do to Lead Again on Oil
Ellen R. Wald (Bloomberg view) Apr 23, 2020
Some bold prescriptions for the kingdom to regain its stature as a stabilizing force in the market.

How the U.S. and China Can Learn to Live With Each Other
Minxin Pei (Bloomberg view) Apr 23, 2020
Mutual anger over Covid-19 will make co-existence difficult. The alternative is worse.

The Necessity of a Global Debt Standstill that Works
Patrick Bolton , Lee Buchheit, Beatrice Weder di Mauro, Pierre-Olivier Gourinchas, Mitu Gulati, Chang-Tai Hsieh, and Ugo Panizza (Project Syndicate) Apr 23, 2020
G20 governments recently agreed to suspend bilateral official loan repayments from 76 of the world's poorest countries until the end of 2020. But, to enable emerging and developing economies to withstand the economic shock of COVID-19, the debt standstill must also include all private creditors.

What COVID-19 Reveals About the US and China
Andrew Sheng and Xiao Geng (Project Syndicate) Apr 23, 2020
Differences in the American and Chinese pandemic responses are often attributed to their political systems: Chinese central planning allows for more resolute action. But this explanation misses the extent to which the two countries' growth models have shaped their responses – and the financial and economic impact of the crisis.

COVID-19 and Europe's New Battle of Ideas
Daniel Gros (Project Syndicate) Apr 23, 2020
On the surface, European Union member states are arguing about whether the bloc should issue mutualized "coronabonds" to help its hardest-hit countries deal with the COVID-19 pandemic. But the real fight is about the future direction of fiscal policy and even the euro itself.

Target R and Wait for the Vaccine
Ricardo Hausmann (Project Syndicate) Apr 23, 2020
Opening up the economy means allowing more human interaction and hence greater potential for new #COVID19 infections. Two numbers matter for deciding whether this can be done safely any time soon.

Who Should Get Bailed Out in the Coronavirus Economy?
John Cassidy (New Yorker) Apr 23, 2020
The pandemic has left small businesses and unemployed workers struggling. Yet there is no shortage of taxpayer money to help large corporations.

Bank risk profiles and the zero lower bound
Johannes Bubeck, Angela Maddaloni, and José-Luis Peydró (VoxEU) Apr 23, 2020
The way that banks in the euro area react to negative central bank interest rates may be closely linked to their individual funding structure. This column suggests that they do not generally pass negative rates on to their depositors, and that they search for yield by investing in riskier securities. New evidence suggests that their investments are directed more towards securities issued by the private sector and securities denominated in dollars.

Robust money markets
Olivier Accominotti, Delio Lucena-Piquero, and Stefano Ugolini (VoxEU) Apr 23, 2020
Informational problems on the money market can lead to credit booms and financial panics. This column shows that, during the first globalisation of 1880-1914, uncollateralised international corporate debts were transformed into highly liquid and safe money market instruments through a refined process of information production involving various intermediaries. This suggests that the design of money market instruments is an essential determinant of the liquidity and resilience of money markets.

Central hubs in global value chains and knowledge creation
Keiko Ito, Kenta Ikeuchi, Chiara Criscuolo, Jonathan Timmis, and Antonin Bergeaud (VoxEU) Apr 23, 2020
Interconnectedness and relative position in global production networks is an important factor for modern economies. In recent years, Japanese firms have lost their relative influence within the regional value chain. This column analyses the relationship between measures of network centrality and firm innovation output. It finds that having access to a greater breadth of customers is positively related to innovative activities, measured by patent applications. The results suggest an important role of knowledge spillovers from foreign markets.

Glimpses of a silver lining in the Great Lockdown
FT View Apr 24, 2020
Crash course in communications technology will have lasting benefits.

Maintaining the lockdown and saving the economy are mutually compatible
Martin Wolf (FT) Apr 24, 2020
It is not a matter of protecting people 'or' the economy but of protecting people 'and' the economy.

The risk of a US double-dip depression is real
Edward Luce (FT) Apr 24, 2020
Reopening states to boost the economy despite the scientific evidence will do more damage than good.

How Asean countries can turn the tide on corruption
Brook Horowitz (FT) Apr 24, 2020
As south-east Asia emerges from coronavirus, it should take on another invisible enemy.

Coronavirus will force a reckoning between tech and its workforce
Richard Waters (FT) Apr 24, 2020
The industry's labour practices have been thrown in sharp relief by the downturn.

Oil is not the only negative price coming to you
Robin Harding (FT) Apr 24, 2020
Minus prices are not uncommon, even if they suggest infinite losses and generate horror.

How to stop economies falling like Humpty Dumpty
Tim Harford (FT) Apr 24, 2020
Economic distress is contagious too and we need a plan to stop its uncontrolled spread.

EU efforts to ease economic crisis beset by domestic strains
Tony Barber (FT) Apr 24, 2020
Leaders are still struggling to find a way to share the burdens of the pandemic.

A Big, Once-Reliable Source of Investor Cash Is Drying Up
Jeff Sommer (NYT) Apr 24, 2020
The losses aren't coming just from the drop in stock prices. The effect of the dividend cuts sweeping through the market will hurt, too.

Covid-19 kills Japan's coveted trade surplus
William Pesek (AT) Apr 24, 2020
Trade surplus collapse of 99% in March is a telling sign of the economic pain to come in Japan

This Bust Wasn't Caused by a Virus
Mark Thornton (Mises Wire) Apr 24, 2020
The COVID-19 panic may have sped up the beginning of this economic crisis, but the virus wasn't the cause. The real cause of the crisis was the boom that came before it.

U.S. Economy May Have Hit the Coronavirus Bottom
Conor Sen (Bloomberg view) Apr 24, 2020
Industries that were shut have nowhere to go but up. There are signs that's happening.

The Fed Should Go Negative Next Week
Narayana Kocherlakota (Bloomberg view) Apr 24, 2020
To fight a deepening recession, it should take U.S. interest rates below zero for the first time ever.

Sell Oil? You Can't Even Give It Away These Days
Mark Gongloff (Bloomberg view) Apr 24, 2020
This is what happens when everybody suddenly stops driving.

What's the Point in Downgrading Italy's Debt?
Marcus Ashworth (Bloomberg view) Apr 24, 2020
A wave of credit-rating cuts isn't helping during the coronavirus pandemic. Looking at relative, rather than absolute, creditworthiness might be better.

Protectionism Is No Cure for Pandemics
Amina Mohamed (Project Syndicate) Apr 24, 2020
Africa has learned the hard way that international cooperation is key to saving lives and extinguishing epidemics. But the mixed global response to the current COVID-19 pandemic, with many countries closing their borders and restricting exports of vital goods, suggests that the world is forgetting this lesson.

Will Global Governance Prove Itself?
Carl Manlan and Henri-Michel Yéré (Project Syndicate) Apr 24, 2020
Although institutions of international and regional integration have chalked up major successes in recent decades, they are hardly immune from internal and external challenges. In fact, both the health emergency and the looming debt crisis brought on by the COVID-19 pandemic will test these structures like never before.

The International Order After COVID-19
Robert Malley (Project Syndicate) Apr 24, 2020
At first blush, the coronavirus pandemic seems likely to corroborate the argument for deeper international cooperation to confront shared global challenges. But crises tend to intensify and accelerate preexisting trends – in this case, the rise of anti-globalist nativism.

COVID-19 and the Thucydides Trap
Yu Yongding and Kevin P. Gallagher (Project Syndicate) Apr 24, 2020
After years of deepening Sino-American divisions, perhaps it is not surprising that the COVID-19 pandemic has made matters worse. But if both countries take a clear-eyed view of their own interests, they will see that cooperation is the best medicine now.

What the Stock Market Is Really Saying
Larry Hatheway and Alexander Friedman (Project Syndicate) Apr 24, 2020
The seeming confidence expressed by global equity markets in the face of the COVID-19 pandemic has surprised many – including many market participants. But a closer look reveals an unambiguous message: The global economy is facing a long, deep malaise, followed by a "new normal" of reduced earnings and profitability for all but a chosen few.

The Game Changer Beyond AI
Geoff Mulgan (Project Syndicate) Apr 24, 2020
For good reason, many people around the world are growing concerned at the speed with which new technologies are replacing labor, disrupting democracy, and manipulating the public for profit. But it doesn't have to be this way: a far superior approach to the design and deployment of technology is already on offer.

How the Other Half Automates
Daron Acemoglu (Project Syndicate) Apr 24, 2020
Economists have long worried that many of the cutting-edge technologies created in advanced economies will not necessarily benefit developing and emerging economies, owing to vast differences in capital intensity and labor-market conditions. This disconnect could grow even more pronounced in the age of artificial intelligence.

Keeping firms afloat during the COVID-19 crisis
Tatiana Didier, Federico Huneeus, Mauricio Larrain, and Sergio Schmukler (VoxEU) Apr 24, 2020
The COVID-19 pandemic has nearly halted economic activity worldwide. Firm cash flows have collapsed, triggering inefficient bankruptcies as firms' valuable relationships are broken. This column proposes hibernation could allow firms to survive the pandemic, while preserving their vital relationships. All stakeholders could share the burden of economic inactivity, helping more firms to survive. However, financial systems are not well equipped to handle this type of exogenous and synchronised systemic shock so governments should work with the financial sector to keep firms afloat.

National policies in a global pandemic
Thorsten Beck and Wolf Wagner (VoxEU) Apr 24, 2020
While COVID-19 is a global pandemic, the policy responses so far have been almost exclusively national. This column uses a theoretical model to analyse national containment policies in an integrated world. The findings suggest that the first-best solution is global coordination on public health responses, including domestic containment policies. In the absence of ability to coordinate on the global level, regional coordination is called for.

Short-term forecasting of the coronavirus pandemic
Jennifer Castle, Jurgen A. Doornik, and David Hendry (VoxEU) Apr 24, 2020
While models based on well-established theoretical understanding and available evidence are crucial to viable policymaking in observational-data disciplines, shifts in distributions can lead to systematic mis-forecasting. This column argues that there is an important role for short-term forecasts using adaptive data-based models that are `robust' after distributional shifts, and discusses an approach to doing so for the Covid-19 pandemic.

Impact of the US coronavirus stimulus package
Christian Bayer, Benjamin Born, Ralph Luetticke, and Gernot Müller (VoxEU) Apr 24, 2020
Among the various measures announced in response to the economic fallout caused by the COVID-19 pandemic, the $2 trillion stimulus package legislated in the US at the end of March 2020 stands out in terms of size. This column quantifies the multiplier of the stimulus's transfer component. It finds that transfers which top up unemployment benefits are particularly effective because they reduce the income risk due to the lockdown ex ante. In this case, the multiplier may be as high as 2.

A Tale of Two Rescue Plans
Michael Hirsh and Keith Johnson (FP) Apr 24, 2020
The United States suffers record unemployment while Europe fares better in battling the coronavirus shutdown.

Consumer Service Spending Set to Boomerang
Tim Quinlan and Shannon Seery (WF) Apr 24, 2020
While the hard data are only now just beginning to trickle in, we expect a never-before-seen cratering in services spending. The silver lining of that retrenchment is that in addition to the typical boost from a pent-up demand for durable goods, we expect an equally unprecedented surge in pent-up services demand to eventually boost growth.

The costs of fighting this crisis will be with us for years
Michael Mackenzie (FT) Apr 25, 2020
We need to adjust to a world of more debt, less globalisation and greater digitalisation.

Will American shale oil rise again?
Derek Brower and David Sheppard (FT) Apr 25, 2020
Donald Trump's efforts to end a price war backfired leaving the industry on its knees.

Why the euro is more durable than it looks
Economist Apr 25, 2020
The commitments of a shared currency are not so easily shaken off.

Deflation Is the Voldemort of the Coronavirus Era
Daniel Moss (Bloomberg view) Apr 25, 2020
It's odd that central bankers aren't talking much about price movement, in either direction.

Coronavirus Has Popped the Boeing and Airbus Bubble
David Fickling (Bloomberg view) Apr 25, 2020
Years of impressive demand forecasts bred hubris. That's been exploded as Covid-19 hollows out the aviation industry.

Trade and COVID-19: The WTO's 2020 and 2021 trade forecast
Eddy Bekkers, Alexander Keck, Robert Koopman, and Coleman Nee (VoxEU) Apr 25, 2020
Among its many regrettable effects, Covid-19 will also have a strong impact on international trade. Forecasting potential trade effects is important for policymaking. This column develops a range of scenarios in a dynamic CGE model to simulate possible trajectories for GDP. It then generates short-term forecasts of trade for various regions and the world using time-series analysis. The outlook for 2020 is bleak with trade possibly declining by between 13% and 32%. Some recovery is expected in 2021.

A proposal to exit the COVID-19 lockdown
Miquel Oliu-Barton, Bary Pradelski and Luc Attia (VoxEU) Apr 25, 2020
A wide range of social distancing and confinement measures have been implemented globally to reduce the spread of Covid-19. Returning to normality is the next challenge. This column proposes a lockdown exit strategy based on two key elements: identifying 'green zones, and then progressively joining them together once it is safe to do so. The zoning approach provides a safe, tractable, and efficient way of rebuilding our social and economic interactions. While exponential growth works against us during the spread of the virus, it can also work for us to create a safe future.

Central bank digital currency: Central banking for all
Jesús Fernández-Villaverde, Daniel Sanches, Linda Schilling and Harald Uhlig (VoxEU) Apr 25, 2020
The possibility and logistics of developing a central bank digital currency for the general public has attracted significant attention. Such an initiative would require central banks to be involved in financial intermediation and maturity transformation. This column explores the implications of such a venture by central banks using a classic banking model. With sufficient competition, a central bank digital currency can be beneficial and achieve the optimal allocation of funds. However, it also risks giving central banks excessive monopoly power, which could result in inferior outcomes.

Services trade and COVID-19
Anirudh Shingal (VoxEU) Apr 25, 2020
While the lockdowns imposed in countries across the world in the wake of COVID-19 will be lifted eventually, social distancing (both voluntary and selective) is likely to stay for longer. This has already had, and will continue to have, a significantly adverse impact on services transactions that require proximity between buyers and sellers. Moving forward, the world could see more regulatory restrictions on services trade on health grounds. This column argues that consequently, trade in services is likely to take longer to recover, with knock-on effects on other sectors of economic activity.

Libra still needs more baking
Barry Eichengreen and Ganesh Viswanath-Natraj (VoxEU) Apr 25, 2020
Earlier this month the Libra Association issued a new White Paper updating its paper of June 2019. This column argues that while the authors of the paper now understand that to succeed, their project must address economic and political concerns, they have done nothing to address worries about currency substitution. A new proposed capital buffer is underspecified. A key market in Libra futures or forwards is missing, as is a Libra lender of last resort.

Donald Trump's Debt to China
John Cassidy (New Yorker) Apr 25, 2020
The Chinese financial investments that end up funding Trump's office buildings are the mirror image of the trade deficit that has cost the United States millions of jobs.

The deflation threat from the virus will be long lasting
Gavyn Davies (FT) Apr 26, 2020
Supply lockdowns could cause bigger declines in global demand, with falling prices.

China can only grow with more state control not less
Michael Pettis (FT) Apr 26, 2020
Beijing's repeated pledges to shrink the state are both empty and impossible.

How to think about the EU's rescue fund
Wolfgang Münchau (FT) Apr 26, 2020
We do not need another big lending programme; equity investments would get us out of the credit-versus-loans debate.

There's Really Only One Way to Reopen the Economy
Aaron E. Carroll (NYT) Apr 26, 2020
The way forward in the coronavirus crisis keeps getting framed as a false choice between saving lives or the economy.

The Fed Punishes Prudence
Sam Long abnd Alexander Synkov (WSJ) Apr 26, 2020
Its bailout for risky debt helps investors, not employees.

A new chance to close the digital divide
BG Apr 26, 2020
The stay-at-home order is illuminating the depth of phone and broadband problems for the most vulnerable people. It's time for fresh ideas to bridge the gap.

How COVID-19 is testing American leadership
Joseph S Nye (EAF) Apr 26, 2020
Even if the United States remains the largest power, it cannot achieve many of its international goals acting alone because of the information revolution and globalisation. But the Trump administration is failing because its national security strategy (and budget) is focussed almost entirely on great power competition, particularly with China.

Asia will fall with the multilateral system unless it now springs to its defence
Alex Rouse and Adam Triggs (EAF) Apr 26, 2020
Modelling shows Asia is the main beneficiary from international cooperation and coordinated economic action.

Negative Oil Prices Were a Warning, Not an Anomaly
Julian Lee (Bloomberg view) Apr 26, 2020
If oil producers don't cut supply, negative prices will come back to force them.

China's Bank Bailouts Are Even Scarier Than They Look
Anjani Trivedi (Bloomberg View) Apr 27, 2020
The financially weak, state-owned rescuers would be dangerous in good times. This is the Covid-19 era.

Forecasting recoveries is difficult: Evidence from past recessions
Zidong An and Prakash Loungani (VoxEU) Apr 26, 2020
Forecasters expect a recession this year in major economies and a rebound in economic activity in 2021. This column asks how credible such forecasts of recovery are. The past record is not inspiring: forecasters have had little ability to tell in advance whether a recession will end in a rebound or continue on for another year. Policy choices, particularly on fiscal stimulus, are better guided by worse-case scenarios than by the baseline forecasts of recovery.

On the distributional effects of controlling a pandemic
Jonathan Heathcote, Andrew Glover, Dirk Krueger and Víctor Ríos-Rull (VoxEU) Apr 26, 2020
Large portions of many countries' economies have been shuttered to slow the spread of COVID-19. Why, three months into the pandemic, does the optimal policy response remain so controversial? This column examines how the welfare effects of shutdown policies vary across different types of households. The model predicts that some groups – young workers in sectors deemed non-essential – would benefit from ending the current shutdown, while others – the old – will surely lose. Current disagreements over when to end shutdowns are thus easy to understand.

Russia's economic woes will clip Putin's wings
FT View Apr 27, 2020
Pandemic combined with collapsing oil prices spells real hardship.

Post-corona growth should be more robust but less optimal
Didier Saint-Georges (FT) Apr 27, 2020
Psychological biases, largely undetected, have been at work in financial markets.

Regulators must now look at commodity trading
Natasha White (FT) Apr 27, 2020
Traders sit at the intersection between financial and physical markets.

Precarity, not inequality is what ails the 99%
Albena Azmanova (FT) Apr 27, 2020
Our predicament is that wealth has become the only apparent source of safety.

Asia's emerging markets brace for economic fallout of coronavirus
James Kynge, Amy Kazmin, and John Reed (FT) Apr 27, 2020
Countries are better insulated than in 1997 financial crisis but uncertainty weighs heavily.

Job or Health? Restarting the Economy Threatens to Worsen Economic Inequality
Jim Tankersley (NYT) Apr 27, 2020
The coronavirus recession has exacerbated the racial and income divides in America. Lifting restrictions too soon will make them worse and leave workers with a bleak choice.

The Central Bank That Ate Japan
WSJ Apr 27, 2020
The Bank of Japan buys the entire economy to fight Covid-19.

It's time to return to globalization. But this time let's do it right.
King Abdullah II (WP) Apr 27, 2020
The coronavirus pandemic reminds us that no country can go it alone.

Bank of Japan opens bond-buying flood gates
William Pesek (AT) Apr 27, 2020
Central bank removes cap on bond purchases but the seemingly aggressive policy may be more rhetorical than substantive.

After COVID 19: Asian Countries and Investing in the US
Shihoko Goto (Globalist) Apr 27, 2020
COVID 19 will change trade relations among Asian countries themselves, as well as between the U.S. and Asia.

What the COVID-19 Crisis Means for Europe and the Eurozone
Jörg Guido Hülsmann (Mises Wire) Apr 27, 2020
It is fundamentally wrong to put the entire economy at the service of a single goal and to commit to a single solution. Human action always involves weighing up different goals and different means.

The Pandemic Will Make Big Companies More Dominant Than Ever
Peter R. Orszag (Bloomberg View) Apr 27, 2020
In a crisis, size has obvious and not-so-obvious advantages.

Stock Markets That Never Fall Are Up to No Good
Noah Smith (Bloomberg View) Apr 27, 2020
A federal backstop for equities will lead to distortions that weigh on growth.

Fed Would Be Foolish to Take Rates Below Zero
Brian Chappatta (Bloomberg View) Apr 27, 2020
The policy has had middling results at best elsewhere and could alarm the already vulnerable American public.

A Lot Has Changed Since the Day the World Changed
John Authers (Bloomberg View) Apr 27, 2020
In normal times, meetings of the three biggest central banks would dominate global markets. We're still far from normal.

Covid-19 Threatens to Starve Africa
Jessica Fanzo (Bloomberg View) Apr 27, 2020
The continent has some unique strengths in the pandemic, but food insecurity is a special vulnerability.

Iran Can No Longer Rely On Trade With China
Esfandyar Batmanghelidj (Bloomberg View) Apr 27, 2020
For all Beijing's claims to support Tehran, it is spooked by American sanctions.

How to Develop a COVID-19 Vaccine for All
Mariana Mazzucato and Els Torreele (Project Syndicate) Apr 27, 2020
Strong health systems, adequate testing capacity, and an effective, universally available vaccine will be key to protecting societies from COVID-19. But ensuring that no one is left behind requires not just unprecedented collective investment, but also a very different approach to innovation.

The End of the US-China Relationship
Stephen S. Roach (Project Syndicate) Apr 27, 2020
From an unnecessary trade war to an increasingly desperate coronavirus war, two angry countries are trapped in a blame game with no easy way out. Now more than ever, both sides need to contemplate the economic and geopolitical consequences of a full rupture.

Whose Information?
Mark Esposito, Terence Tse, Aurélie Jean, and Joshua Entsminger (Project Syndicate) Apr 27, 2020
Today's tech giants are hardly the first corporations to achieve massive scale and entrench their dominance over key economic sectors. But unlike the monopolies of old, Big Tech has capitalized on the power of information itself to shut out potential competitors and manipulate consumer preferences and behavior.

Preventing Data Authoritarianism
Katharina Pistor (Project Syndicate) Apr 27, 2020
While digital technologies once promised a new era of emancipatory politics and socio-economic inclusion, things have not turned out quite as planned. Governments and a few powerful tech firms, operating on the false pretense that data is a resource just like oil and gold, have instead built an unprecedented new regime of social control.

The interaction between Covid-19 and an ageing society
Andrew Scott and Jonathan David Old (VoxEU) Apr 27, 2020
COVID-19 is the first pandemic to since the world's population consisted of more people aged over 65 than under five. Given that COVID-19 fatality rates rise sharply with age, that substantially affects the number of people at risk and the gains from social distancing. This column reveals that adjusting for change in the age structure and longevity of the US, the value of social distancing today is more than three times its corresponding 1920 value. Ageing societies and longer lives support considerably longer economic shutdowns compared to past pandemics.

A coronavirus weak-spot for an exit strategy
Uri Alon and Eran Yashiv (VoxEU) Apr 27, 2020
Countries are facing stark choices between ending the lockdown to revive people's lives and risking the ravages of the COVID-19 pandemic. This column proposes an exit strategy from lockdown based on a vulnerability in the coronavirus transmission mechanism, i.e. the latent period in which most infected people do not infect others. An optimal work/lockdown cycle based on this weak spot could minimise infection risks while greatly improving the painful trade-offs faced by policymakers.

Europe must act now to prepare the aftermath of the pandemic crisis
Laurence Boone and Álvaro Santos Pereira (VoxEU) Apr 27, 2020
The crisis faced by Europe is extraordinary and requires extraordinary responses. It is also a unique opportunity for Europe, and in particular the EMU, to consolidate its economic and financial architecture and to promote Europe as the engine of "shared prosperity". This column argues that a significantly reinforced and revamped ESM or a new financial instrument based on joint issuance are possible vehicles to translate words into action.

Chinese Debt Could Cause Emerging Markets to Implode
Benn Steil and Benjamin Della Rocca (FA) Apr 27, 2020
Beijing needs to help its poor borrowers through the pandemic.

The Coronavirus Has Pushed North Korea's Economy to the Edge
Thomas Byrne (FP) Apr 27, 2020
Despite the crisis, there's no signs of reform from Pyongyang.

Monitoring the International Impact of COVID-19
Nick Bennenbroek and Jen Licis (WF) Apr 27, 2020
As 2020 progresses, evidence continues to mount on the severe damage COVID-19 and associated lockdown measures are causing to the global economy. We expect an essentially synchronized contraction for all the major foreign economies we monitor and see global GDP declining 2.9% this year.

Crude Reality
Brendan McKenna and Jen Licis (WF) Apr 27, 2020
Oil markets have come under extreme pressure this year amid the COVID-19 outbreak which has significantly reduced demand. In addition, the price war between Saudi Arabia and Russia earlier this year added to the supply glut. Although OPEC+ producers recently took action to cut production, the magnitude of cuts will likely not be sufficient to remove excess supply from the market.

How Long Can U.S. Businesses Remain Shut Down?
ay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Apr 27, 2020
The sudden stop in economic activity caused by the COVID-19 pandemic means that many businesses will need to rely on their cash reserves to survive the next few months. If businesses can forgo profits temporarily and do not need to purchase most inputs, then we estimate that the overall business sector could hold on for roughly four months.

Deflation is a bigger fear than hyperinflation
FT View Apr 28, 2020
A collapse in demand is reducing prices even as central banks print money.

Why China's smaller businesses are struggling to access credit
Henny Sender (FT) Apr 28, 2020
SMEs are having a hard time, in large part because they are shunned by state-owned banks.

Don't handcuff private capital in this crisis
Jon Gray (FT) Apr 28, 2020
Blackstone and other PE firms can give companies a fighting chance of survival.

Covid-19 has silver linings for Argentina's president
Benedict Mander (FT) Apr 28, 2020
Fernández' gains strong approval ratings and legitimate excuse in debt negotiations.

China's Factories Are Back. Its Consumers Aren't.
Keith Bradsher (NYT) Apr 28, 2020
The manufacturing giant is once again turning out steel and cellphones. But job losses and pay cuts have left its people reluctant to spend — a problem the U.S. and Europe may soon face, too.

Don't believe the hype. Canada is unlikely to embrace universal basic income just yet.
J.J. McCullough (WP) Apr 28, 2020
A UBI-type system has no real pretense of being affordable or immune to abuse.

The next big US-China battle
Brian Caplen (Banker) Apr 28, 2020
China is pushing ahead with its digital yuan to remove itself from the dollar's orbit.

The revived centrality of the G20
Suman Bery and Sybrand Brekelmans (Bruegel) Apr 28, 2020
Much was expected from the meeting of G20 Finance officials earlier this month. In the event the meeting decided on a standstill of the poorest countries' debt service but failed to agree on a fresh allocation of the IMF's Special Drawing Rights (SDRs). We argue that this is a reasonable outcome under the circumstances even if more could have been done, and that the G20 is again at center-stage in global economic cooperation.

Bias against private sector slows China's recovery from COVID-19
Tianlei Huang and Nicholas R. Lardy (PIIE) Apr 28, 2020
The principle that all firms—whether private sector or state-owned and controlled—should be treated equally in China was enunciated by Premier Li Keqiang last year in his 2019 Government Work Report before the National People's Congress. But the latest data show that China's private companies have suffered stronger challenges than their state-owned counterparts from the COVID-19 epidemic, despite the multiple highly targeted policy measures the government has adopted. Unless this bias changes, China's economic recovery from COVID-19 will be delayed.

What Fracker Earnings Really Need Are Fewer Frackers
Liam Denning (Bloomberg View) Apr 28, 2020
The sector is just too fragmented to lure back investors.

What Opening Up a Bank Account Taught Me About Oil Futures
Shuli Ren (Bloomberg View) Apr 28, 2020
In China, opening up a checking account seems more difficult than investing in complex financial products.

The Fed Will Soon Need to Stem Deflation
Tim Duy (Bloomberg View) Apr 28, 2020
It won't be long before the central bank begins to acknowledge the fallout from declining wage rates and salaries on the economy.

The World's Economic Visionaries Can't See Past Tomorrow
Daniel Moss (Bloomberg View) Apr 28, 2020
The Bank of Japan was once a monetary policy pioneer. Now it's in crisis mode.

Brazil Hits a Wall and Takes Latin America With It
John Authers (Bloomberg View) Apr 28, 2020
The coronavirus has exposed weak leadership in Brazil and Mexico and disturbed economic fault lines, upending two decades of relative stability.

The Coming Greater Depression of the 2020s
Nouriel Roubini (Project Syndicate) Apr 28, 2020
While there is never a good time for a pandemic, the COVID-19 crisis has arrived at a particularly bad moment for the global economy. The world has long been drifting into a perfect storm of financial, political, socioeconomic, and environmental risks, all of which are now growing even more acute.

How to Use the SDR
Jim O'Neill and Domenico Lombardi (Project Syndicate) Apr 28, 2020
With governments in need of new options to shore up national economies during the COVID-19 lockdown, an older but potentially more powerful mechanism is already available. If deployed in the right way, the IMF's international reserve asset could mobilize substantial capital at effectively no cost.

The Myth of the Tech Race
Yuen Yuen Ang (Project Syndicate) Apr 28, 2020
By fundamentally misunderstanding the difference between the American and Chinese tech scenes, Western policymakers and analysts have rallied behind a zero-sum competition when they should be looking for opportunities to cooperate and reinvest in domestic capacities. Not only are China and America's technological comparative advantages different from one another, but they could even be mutually beneficial.

The COVID-19 Balancing Act
Michael J. Boskin (Project Syndicate) Apr 28, 2020
Although the economic and human costs of the COVID-19 pandemic have been devastating, a strategy for reducing the health risks of a gradual return to normalcy has begun to take shape. The task now is to navigate the difficult trade-offs and even more difficult politics of the crisis as sensibly as possible.

Globalisation for sale
Michael Blanga-Gubbay, Paola Conconi, and Mathieu Parenti (VoxEU) Apr 28, 2020
The number of regional trade agreements has grown significantly in recent years. There is an ongoing debate about the winners and losers from these agreements, as well as the political economy that shapes them. This column uses extensive data on lobbying expenditures in the US to analyse how firms exert political influence for free trade agreements. It shows that virtually all lobbying firms are in favour of such agreements. A theoretical model is used to explain this finding and further characterise the intensive margin of lobbying expenditures.

Brakes or bans: Protecting financial markets during a pandemic
Laura Kodres (VoxEU) Apr 28, 2020
Amid the uncertainty of the COVID-19 pandemic, the movements in equity markets' around the world have mirrored the spread of the virus and its virulence. Attempts to limit market crashes, volatility, and financial contagion have taken a number of different forms. This column explores the two main policy responses available to financial market regulators – bans on short sales versus circuit breakers – and reviews them in the context of some 'best practices' for market regulation.

COVID-19 could spur automation and reverse globalisation – to some extent
Adnan Seric and Deborah Winkler (VoxEU) Apr 28, 2020
The COVID-19 pandemic has exposed the vulnerabilities of global value chains. In response to supply chain risks, global lead firms have relied on Industry 4.0 technologies as well as reshoring parts of production. This column explores the potential impacts of these developments on the breadth and depth of global value chains. Automation and reshoring allow for more flexible adjustment to changing demand and the mitigation of supply-side risks. Ultimately, the implications of automation on development will depend on both the types of foreign inputs sourced as well as the relationship between robots and labour.

COVID-19 Could Bring Down the Trading System
Chad P. Bown (FA) Apr 28, 2020
How to stop protectionism from running amok.

Oil Price Shock: What It Means for Producers and Consumers
K@W Apr 28, 2020
With drastic declines in consumer demand, the COVID-19 pandemic has battered the oil markets in ways that we haven't seen before.

Europe Can Afford to Fight With China
Luke Patey (FP) Apr 28, 2020
Beijing likes to use economic threats to bully European countries. But they don't need China as much as they think.

India Cracks Down on Chinese Investment as Mood Turns Against Beijing
Harsh V. Pant and Nandini Sarma (FP) Apr 28, 2020
Like many countries angered by Beijing's mishandling of the coronavirus outbreak, India has turned skeptical of economic dependence on China.

Fiscal Fallout from the COVID-19 Pandemic: Part III
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Apr 28, 2020
In the third installment of our three-part series on the fiscal implications of the COVID-19 pandemic, we analyze how the U.S. government reduced its debt-to-GDP ratio after the Second World War.

The Man with the U.S. Economy (and Trump's Reëlection Chances) in His Hands
John Cassidy (New Yorker) Apr 28, 2020
In March, Donald Trump labelled Jerome Powell, the chair of the Federal Reserve, an "enemy." Now the President's chances in November may hinge on the Fed's response to the coronavirus.

How to preserve jobs as retention schemes wind down
FT View Apr 29, 2020
Programmes should be flexible and help workers move to in-demand sectors.

Coronavirus is speeding up the disappearance of cash
Gary Cohn (FT) Apr 29, 2020
Pandemic boosts shift towards digital wallets and currencies.

Unseen risks of commodity trade finance
Baldev Bhinder (FT) Apr 29, 2020
The Hin Leong collapse has exposed deeper issues in financing raw materials trades.

Crisis lays bare risks of financial leverage, again
Martin Wolf (FT) Apr 29, 2020
This time it is capital markets, rather than banks, that have to reform.

The hedge fund class of 2020 is more resilient than in 2008
Laurence Fletcher (FT) Apr 29, 2020
Broader institutional ownership means investors are less likely to bolt.

Wave of corporate defaults owes much to foolhardy share buybacks
John Plender (FT) Apr 29, 2020
Big investors must adopt a tougher stance on balance sheet resilience.

China slowdown puts Xi in political bind
Don Weinland (FT) Apr 29, 2020
Coronavirus threatens Communist party's aim of widespread prosperity by end of 2020.

Worst Economy in a Decade. What's Next? 'Worst in Our Lifetime.'
Ben Casselman (NYT) Apr 29, 2020
U.S. gross domestic product declined in the first quarter, dragged down by the pandemic's grip in March. Don't even ask about this quarter.

The Government Economy
WSJ Apr 29, 2020
GDP shrinks 4.8% as private spending and investment plunge.

We cannot fix the flaws in our supply chains with an executive order
Megan McArdle (WP) Apr 29, 2020
Covid-19 has exposed the vulnerabilities of our food supply chains.

China's consumers face spending dilemma
Gordon Watts (AT) Apr 29, 2020
Households boost savings amid concerns of a Covid-19 second-wave and rising unemployment, a report reveals.

Why the oil, gas industry will never be the same
Marshall Auerback (AT) Apr 29, 2020
The upheavals in the oil market are flipping the world on its head and again proving that rational industrial policy is a better guidance.

The state steps in to save global economies
Lori M Wallach (LMD) Apr 29, 2020
Covid-19 has forced governments to prioritise the needs of their citizens. To do that, they've had to override the ideas and laws that underpinned the extreme globalisation of the past 30 years. A quick return to business as usual gets less likely by the day; that gives us a unique chance to rewrite the economic rules once and for all.

Europe's next budget is another twist in long road to solidarity
Jacob Funk Kirkegaard (PIIE) Apr 29, 2020
Despite the failure of European leaders to agree on next steps battling the COVID-19 pandemic, their meeting on April 23 hinted that progress toward economic recovery and a pro-European approach is becoming more likely.

COVID-19 Pandemic and the Caribbean: Navigating Uncharted Waters
Krishna Srinivasan, Sònia Muñoz, and Varapat Chensavasdijai (IMF) Apr 29, 2020
The "sudden stop" in tourism is sharply slowing economic activity in the Caribbean.

US: High Time for a New New Deal
Alexei Bayer (Globalist) Apr 29, 2020
How to save the U.S. economy from a looming depression.

While Creating Fiscal Space for COVID-19 in Developing Countries, Be Sure to Consult Civil Society
Andrew Wainer, Sanjeev Gupta and Mark Plant (CGD) Apr 29, 2020
Just as in the United States, where some of the most effective responses to the global pandemic are generated locally, the success of developing countries will also be determined by the actions of local leaders, citizens, and organizations—including fiscal responses.

What Bankers Are Really Worried About
Ferdinando Giugliano (Bloomberg View) Apr 29, 2020
Regulation isn't the only impediment to lending during a crisis. The banks are possibly even more worried about looking weak to their investors.

Modi's India Is Hurting. It Needs a Roosevelt
Andy Mukherjee (Bloomberg View) Apr 29, 2020
A $39 billion aid program for small businesses could be the first step toward a new deal for suffering migrant workers.

Christine Lagarde Can't Solve the Covid-19 Crisis
Ferdinando Giugliano (Bloomberg View) May 4, 2020
The ECB can't force banks to lend, nor governments to spend. Managing the Covid-19 crisis goes way beyond the powers of the central bank.

The $793 Billion Credit Market Recovery Is on Shaky Ground
Marcus Ashworth (Bloomberg View) Apr 29, 2020
Corporate bond yields have recovered their poise of late, but there's still plenty that could go wrong as the world starts to emerge from lockdown

Negative Oil Scars Will Linger for Frackers
Liam Denning (Bloomberg View) Apr 29, 2020
Hedging future production may get much costlier.

Oil Is the Wedge That Could Knock Over the World
Mark Gongloff (Bloomberg View) Apr 29, 2020
What's happening to oil now will affect us for decades.

Lessons from the Economic-Epidemiological Frontier
Christopher Pissarides, Pietro Garibaldi, and Espen R. Moen (Project Syndicate) Apr 29, 2020
Although the COVID-19 pandemic has forced economists to adjust their models and update their assumptions, it has not depleted their arsenals. By absorbing key insights from epidemiology, economics can still offer valuable lessons for how to navigate the current crisis.

American Carnage
J. Bradford DeLong (Project Syndicate) Apr 29, 2020
Throughout Donald Trump's presidency, it has been obvious that the American political system and public sphere are broken. But only with the federal government's embarrassingly incompetent response to the COVID-19 pandemic has that breakdown translated into a significant loss of life.

Reading the COVID-19 Market
Jim O'Neill (Project Syndicate) Apr 29, 2020
There is no telling whether equity markets are correct in defying the popular narrative about a coming Great Depression-scale downturn. Investors may be clinging to irrational hopes, or they may be betting that reports of the death of globalization have been greatly exaggerated.

The Virus that Changed the World
Joschka Fischer (Project Syndicate) Apr 29, 2020
The COVID-19 pandemic has brought the most technologically capable generation in the history of civilization to its knees in the space of just a few weeks. For all of our command over nature, the crisis shows that our political institutions are no longer fit for purpose, and must be made anew.

Dopamine Capitalism
William H. Davidow and Michael S. Malone (Project Syndicate) Apr 29, 2020
It is no secret that with the digital revolution has come many new forms of addiction, as users chase after social-media "likes" and other online stimuli. But less understood is the extent to which most of the tech industry now relies on behavioral manipulation to maximize profits at the expense of our wellbeing.

Going Green in China: Firms' Responses to Stricter Environmental Regulations
Haichao Fan, Joshua Graff Zivin, Zonglai Kou, Xueyue Liu, and Huanhuan Wang (VoxChina) Apr 29, 2020
Evidence from China shows that firms respond to stricter enforcement of the emission reduction target by reducing their pollution. This effect is stronger for firms in industries with higher pollution intensity. Stricter environmental regulations also lead to sharp declines in firms' profits, capital, and labor. A sequence of tests of the underlying mechanisms reveals that firms rely more on recycling and abatement investment than on innovations to meet environmental requirements.

Make sure the ESM's pandemic crisis support is fit for purpose!
Giancarlo Corsetti and Aitor Erce (VoxEU) Apr 29, 2020
The Eurogroup recently agreed to provide support during the Covid crisis through a dedicated European Stability Mechanism credit line. A discussion is playing out in European capitals, most intensely in Rome and Madrid, regarding the usefulness of tapping these credit lines. While the final details are still pending, this column evaluates the conditions that seem to be currently on the table. As these programmes provide very little interest savings, designing them in such a way that would not trigger disruptions in the bond markets of borrowing countries is key. To this end, the ESM should consider waiving its seniority and engaging with countries using longer maturity structures.

Collapsing oil prices: A window of opportunity for manufacturing
Torfinn Harding, Radek Stefanski, and Gerhard Toews (VoxEU) Apr 29, 2020
Due to the collapse in the price of oil, oil-exporting economies are experiencing a huge loss of foreign revenues. This column argues that this may create a window of opportunity to transition away from resource dependence by expanding the tradable goods sector, hence diversifying the economies. Assuming symmetric economic responses for booms and busts and relying on estimates for unexpected giant resource discoveries which predict an appreciation of the real exchange rate and a contraction of the manufacturing sector, the current drop in the oil price may lead to a boom in manufacturing.

When a pandemic collides with a leveraged global economy
Mike Harmon and Victoria Ivashina (VoxEU) Apr 29, 2020
Over the past decade, low interest rates attracted borrowers to leveraged credit markets, which have since reached an unprecedented size and risk. The collision of a highly leveraged corporate sector with the severe economic shock from COVID-19 has created unique financial problems. This column analyses the main vulnerabilities in the loan market and evaluates the current US government response. Although the current stimulus programmes are significant, they can be improved to better target at-risk businesses, mitigate moral hazard, and optimise the level of direct government funding.

COVID-19 and Trade Policy: Why Turning Inward Won't Work
Richard Baldwin and Simon Evenett (VoxEU) Apr 29, 2020
Incomes and trade are collapsing worldwide. Many nations have imposed export restrictions on medical supplies and food, raising the spectre of across-the-broad protectionism. This column introduces a new eBook that asks: Should governments turn inward? The answer is "No". Turning inwards won't help tackle the health crisis, it will harm many (especially in developing nations), and it will hinder the collaborative spirit that the human race will need to defeat this disease. Trade isn't part of the problem – it's an essential part of the solution.

The 1918 influenza did not kill the US economy
Efraim Benmelech and Carola Frydman (VoxEU) Apr 29, 2020
The immediate economic fallout for the US economy from the coronavirus pandemic is predicted to be disastrous. In comparison, while the Spanish flu also had some economic consequences, they were mostly modest and temporary. This column evaluates the developments in the US economy during the 1918 influenza, in search of a possible explanation for the limited adverse effects of the flu despite similar social distancing requirements, albeit at a lower scale. It concludes that a large expansion in government demand can go a long way in softening the economic impact of the crisis we face today.

Terminal Deflation Is Coming
Trevor Jackson (FP) Apr 29, 2020
Central banks' interventions in the pandemic economy are unprecedentedly vast—and not nearly enough.

FOMC Meeting: Committee Ready To Do More, If Needed
Jay H. Bryson (WF) Apr 29, 2020
Because it has implemented a number of unprecedented policy steps in recent weeks, the FOMC took no further action at today's meeting. But it is prepared to do more, if needed.

ETFs have proved critics wrong during the crisis
FT View Apr 30, 2020
Popular funds have survived a period of intense market stress.

Failure of oil price war may cost Putin dear
David Gardner (FT) Apr 30, 2020
Trump's benevolence towards the Russian president cannot be relied on.

To save the eurozone, the ECB must turn back time
Claire Jones (FT) Apr 30, 2020
Policymakers need to explicitly target pre-crisis spreads to stop the pandemic infecting credit conditions. If they don't, the stability of the region is at serious risk.

India: the millions of working poor exposed by pandemic
Amy Kazmin and Jyotsna Singh (FT) Apr 30, 2020
More than 140m migrant workers have lost jobs since the lockdown began and now face destitution.

Why the Global Debt of Poor Nations Must Be Canceled
Abiy Ahmed (NYT) Apr 30, 2020
Delaying the repayments to the Group of 20 is not enough.

Oil price rally belies hard Covid-19 realities
Tim Daiss (AT) Apr 30, 2020
Oil price rally is being driven by irrational exuberance with little real good economic or industry news in sight

China faces triple whammy amid Covid-19 crisis
Gordon Watts (AT) Apr 30, 2020
Factory activity slows, export orders dry up and consumers worry about job security as the virus stalks the planet.

Life after lockdowns
Economist Apr 30, 2020
It will be hard in ways that are difficult to imagine today.

A "New Deal" for Informal Workers in Asia
Era Dabla-Norris and Changyong Rhee (IMF) Apr 30, 2020
Effective policy responses must reach informal workers and their families quickly to prevent them from falling (deeper) into poverty.

Looking Beyond Market Stabilization to the Future Path of Monetary Policy
Tiffany Wilding (PIMCO) Apr 30, 2020
Over the next several quarters, monetary conditions will likely be set not only by Fed balance sheet policies, but also by the expected path of interest rates.

Europe's pandemic price tag to keep firms afloat
Simeon Djankov (PIIE) Apr 30, 2020
First, this crisis requires massive government spending. Second, this spending is through infusion of money into the private sector. Third, this money is best disbursed as interest-free loans through commercial banks. Fourth, as the recovery accelerates—and this may only be next year and in some sectors in 2022—parliaments around Europe need to consider schemes of debt forgiveness for the private sector.

Maximizing IDA's COVID-19 Crisis Response: Why a Debt Standstill Isn't the Right Approach (For Now)
Clemence Landers, Scott Morris and Nancy Lee (CGD) Apr 30, 2020
Let's unpack our arguments for why a debt standstill would be the wrong move for IDA at this point in time.

In the COVID-19 War, the IMF Arsenal Must Fully Benefit Low-Income Countries
Daouda Sembene (CGD) Apr 30, 2020
The COVID-19 pandemic is taking a huge economic toll in low-income countries. The IMF has provided prompt support to help mitigate it, but it could and should do much more. The political commitment of the international community will be essential for the institution to fulfill its potential.

Christine Lagarde Can't Solve the Covid-19 Crisis
Ferdinando Giugliano (Bloomberg View) Apr 30, 2020
The ECB can't force banks to lend, nor governments to spend. Managing the Covid-19 crisis goes way beyond the powers of the central bank.

The Many New Indicators of an Epic Job Collapse
Michael R. Strain (Bloomberg View) Apr 30, 2020
Economists' workforce surveys are more current than the government's. And more terrifying.

It's Reform or Ruin for Lebanon
Hussein Ibish (Bloomberg View) Apr 30, 2020
The country's political elite resists change, but growing anger about the economy could force a reckoning.

Stock Traders Should Heed the Lessons of the 1930s
Gary Shilling (Bloomberg View) Apr 30, 2020
The economic outlook is not unlike the Great Depression years, and that didn't turn out well for equities.

Why Germany Will Never Be Europe's Leader
Andreas Kluth (Bloomberg View) Apr 30, 2020
Italians and other Europeans are eager for Germany to take responsibility for the EU and share their financial burden. Even if it could, it wouldn't.

Business Leaders Commit to a Clean Economic Recovery
Bertrand Piccard (Project Syndicate) Apr 30, 2020
With pressure mounting in some quarters for a return to "normal," there can be no delay in planning for the post-pandemic future. Unless the world's leading businesses commit to rebuilding on an entirely new foundation, another global crisis will be inevitable.

Salvaging Globalization
Mark Leonard (Project Syndicate) Apr 30, 2020
Like other recent systemic crises, the coronavirus pandemic has confronted us with an inconvenient truth: the risks associated with international openness might very well outweigh the gains. If today's multilateral frameworks are to have a future, they must be brought back into the service of national sovereignty.

From Lockdown to Lock-In
Simon Johnson and Peter Boone (Project Syndicate) Apr 30, 2020
Gone are the days of short international travel, or long trips visiting multiple countries. In the absence of universal vaccination against the coronavirus, tighter constraints on human mobility will presumably remain in place – perhaps for a long time.

Building a Post-Pandemic World Will Not Be Easy
Jean Pisani-Ferry (Project Syndicate) Apr 30, 2020
Both the COVID-19 crisis and the climate crisis highlight the limits of humanity's power over nature. But while both remind us that the Anthropocene epoch may jeopardize our continued existence, and that benign everyday behavior can result in catastrophic outcomes, such similarities must not obscure crucial differences.

Central banks' Covid-19 policy response
Ricardo Caballero and Alp Simsek (VoxEU) Apr 30, 2020
The Covid-19 shock has caused large turmoil on financial markets. This column argues that non-financial supply shocks such as the current one can endogenously lead to financial shocks and severe contractions in asset valuations and aggregate demand, which substantially amplify a recession. Conventional monetary policy can mitigate the downward pressure as long as the interest rate is unconstrained. If it is, large-scale asset purchases by government facilities are needed to prevent a downward spiral.

Coronataxes as a solution
Timo Loyttyniemi (VoxEU) Apr 30, 2020
The Covid-19 crisis is raising the financial burden for governments in Europe and worldwide. The current focus is on short-term immediate actions and targeted financial benefits to minimise the negative economic impacts. Soon the discussion will focus on how to manage the sovereign debt burden. In Europe, the public debate has centred around Coronabonds, while inflationary solutions have also been receiving academic attention. This column argues that a more practical solution is to introduce simple, temporary 'coronataxes' over the next five to ten years. These taxes could be implemented nationally and supported by European-level coordination.

Corporate profitability and the global persistence of corruption
Stephen P. Ferris, Jan Hanousek, and Jiri Tresl (VoxEU) Apr 30, 2020
Corporation corruption is an issue that remains at the forefront of regulatory policy. This column examines the persistence of corruption among a sample of privately held firms from 12 Central and Eastern European countries. Creating a proxy for corporate corruption based on a firm's internal inefficiency, it is suggested that corruption can enhance a firm's overall profitability. A channel analysis reveals that inflating staff costs is the most common approach by which firms divert funds to finance corruption. Corruption may persist simply because of its ability to improve a firm's return on assets.

Buyer responsibility and the crisis in Bangladesh
Christopher Woodruff (VoxEU) Apr 30, 2020
Low-income countries lack the resources to replicate European-style income support programmes to alleviate the economic impact of COVID-19 lockdowns. In Bangladesh, a key challenge will be to support export-oriented production in the ready-made garment sector, which employs 4 million workers. Whether factories retain or lay off workers in response to government policies – and whether the health crisis escalates into a humanitarian crisis or not – depends crucially on decisions of foreign apparel buyers to honour or drop commitments to previously agreed orders.

The effects of recessionary stimulus programmes
Juanita Gonzalez-Uribe, Su Wang, and Simeon Djankov (VoxEU) Apr 30, 2020
Loan guarantees to small businesses are emerging as a main policy response during the COVID-19 crisis. Using evidence from the UK's Enterprise Finance Guarantee scheme from 2009, this column argues that such policies enable some financially constrained firms to retain workers that otherwise would have been laid off, and whose retention was fundamental in rebuilding the businesses post-crisis. However, less-educated workers in jobs with low training costs are more likely to be laid off, implying that the guarantee policy is regressive.

EU recovery fund: An opportunity for change
Massimo Motta and Martin Peitz (VoxEU) Apr 30, 2020
The European Commission has been asked to develop a proposal for a new recovery fund of more than €1 trillion. Given the substantial support needed by most sectors in the present circumstances, it is crucial to identify the ones which are most important to proper functioning of the EU economies. Based on the principle of subsidiarity, this column formulates two general criteria to identify these sectors: those for which (i) the volume of cross-border trade within the EU is large, or (ii) externalities across member states are important. Support schemes should be oriented towards the future and not try to preserve the status quo ante.

Green bridges: Reconnecting Europe to avoid economic disaster
Bary Pradelski and Miquel Oliu-Barton (VoxEU) Apr 30, 2020
The tourism industry has already been heavily impacted by the Covid-19 pandemic, and a 'cancellation' of the summer season would further push many European countries towards an unprecedented economic crisis. This column proposes to elevate the authors' recently proposed zoning approach to the pan-European level. Allowing 'green bridges' to exist between regions where the virus is under control – regardless of whether the latter are in the same country – could help save the tourism sector, the economic viability of several European countries, and probably also the balance within the European Union.

When Globalization Really Began
Valerie Hansen (YaleGlobal) Apr 30, 2020
Regional trade routes connected and ideas began circling the globe in the year 1000.

Economy Slumps, ECB Eases Modestly
Nick Bennenbroek (WF) Apr 30, 2020
The Eurozone economy declined 3.8% quarter-over-quarter in the first quarter, matching expectations but still the largest quarterly decline on record, with sizable falls in French, Italian and Spanish GDP.