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The impact of COVID-19 on education

The COVID-19 pandemic is first and foremost a health crisis. Many countries have (rightly) decided to close schools, colleges and universities. The crisis crystallises the dilemma policymakers are facing between closing schools (reducing contact and saving lives) and keeping them open (allowing workers to work and maintaining the economy). The severe short-term disruption is felt by many families around the world: home schooling is not only a massive shock to parents’ productivity,...

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Building effective short-time work schemes for the COVID-19 crisis

The international public-health response to the COVID-19 pandemic has put our economies into severe hardship. The economic crisis we are experiencing is highly unusual. This is not only because of the unprecedented scope and speed with which business activity has come to a halt, but also for the largely asymmetric effects it is having on different sectors of the economy, with some having experienced drastic contraction and others being under pressure due to labour shortages. And...

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Coping with a dual shock: COVID-19 and oil prices

The novel coronavirus, which Chinese authorities first reported to the World Health Organization (WHO) on 31 December 2019, has spread globally. The virus has infected more than 300,000 people, causing about 13,000 deaths (as of 22 March 2020), although more than 90,000 individuals have now recovered. Countries in the Middle East and North Africa (MENA) face a dual shock: the COVID-19 pandemic and a collapse in oil prices. The virus has seriously affected Iran and has spread to...

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COVID- 19, inequality, and gig economy workers

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...

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Economists in the 2008 crisis: Slow to see, fast to act

As the 2008 Global Crisis was unfolding, the public – both general and academic – began criticising economics and finance scholars for failing to anticipate it. Bernanke (2018: 1) suggested that the full nature of the crisis was not anticipated because “… economists and policymakers significantly underestimated its ultimate impact on the real economy.” Moreover, all existing models ignored the behaviour of financial intermediaries and other credit-related factors. According to...

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The COVID concussion and supply-chain contagion waves

Supply chain contagion waves: Thinking ahead on manufacturing ‘contagion and reinfection’ from the COVID concussion COVID-19’s impact on world manufacturing is radically different than the impact caused by other pandemics over the last 100 years. This one struck all the largest manufacturing economies in the world (Figure 1) – and pretty much all at once. As a result, these nations are entering a very strange type of recession – what might be called the ‘COVID...

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Housing and wealth inequality: A story of policy trade-offs

A house is both a shelter and an asset. The former addresses one of the most basic needs of households: living under a roof. The latter refers to housing being a vehicle for wealth accumulation. Housing market dynamics result from the interaction between these possibly conflicting dimensions. On the one hand, households seek good-quality housing to shelter their families and, nowadays, face a housing affordability crisis in several OECD countries, especially in cities. On the...

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Policy for the COVID-19 crisis: IGM Forum survey

Lockdowns, economic contraction and public investment in treatment capacity: Views of leading economists Just three weeks ago, the likelihood of a major US recession as a consequence of the global pandemic was still in question. In the last few days of March, the number of claims filed for unemployment insurance hit record levels (Department of Labor 2020); the total number of COVID-19 cases in the United States went past 150,000, already substantially higher than...

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Monetary policy and household consumption

Empirical evaluations of monetary policy have traditionally focused on the responses of macroeconomic aggregates. Instead, this column uses detailed administrative data from Norway to uncover substantial heterogeneity in the effects of monetary policy at the household level. The authors find that not only low-liquidity households but also high-liquidity ones also show strong responses. Interest rate changes faced by borrowers and savers feed into consumption, and indirect effects...

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COVID, Fed swaps and the IMF as lender of last resort

Amid escalating concerns about the real implications of the COVID pandemic (Baldwin and Weder di Mauro 2020), emerging markets (EMs) are, once again, in the line of fire. While developed countries can – and should –fund massive fiscal stimuli by issuing debt at interest rates close to zero, EMs are at the short end of the flight to quality: they face a sudden stop, widening of credit spreads and mounting exchange rate pressure; in addition to the generalized decline in global...

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