Global crisis

Thorsten Beck, Nicola Fuchs-Schündeln, Refet S. Gürkaynak, Andrea Ichino, 10 February 2016

The Global Crisis was a watershed, not just for economies around the world, but for economics as a discipline. This column introduces a special issue of Economic Policy that collects key papers on the Global Crisis published in its aftermath between 2009 and 2014. The papers chart the evolution of economists’ thinking on the causes of and cures for the Global and EZ Crises. 

Sam Langfield, Marco Pagano, 01 February 2016

Why is growth in Europe so low? Among the contributing factors, this column highlights the role of financial structure. Intermediation in Europe is heavily bank-based, and the authors' novel empirical findings indicate that such a structure exerts a negative effect on long-run economic growth and exacerbates its response to sharp drops in real estate prices. The findings support policymakers’ efforts to rebalance financial structure towards securities markets.

Dae Woong Kang, Nick Ligthart, Ashoka Mody, 19 January 2016

Although the Great Recession was viewed as a US problem, the Eurozone was affected by it from the start. This column compares the monetary policy responses to the Crisis by the Fed and the ECB. It argues that the US approach has been much more aggressive and proactive. The ECB failed to provide stimulus when needed, and as a result the Eurozone might slip into a low-inflation trap.

Janet Currie, 15 January 2016

Studies of the effects of economic fluctuations on health have come to wildly different conclusions. This may be because the effects are different for different groups. Using US data, this column looks at the health consequences of the Great Recession on mothers, a sub-population that has thus far been largely neglected in the literature. Increases in unemployment are found to have large negative health effects and to increase incidences of smoking and substance abuse among mothers. These effects appear to be concentrated on disadvantaged groups such as minorities, and point to short- and long-term consequences for their children.

Daiji Kawaguchi, Ayako Kondo, 13 January 2016

Economists frequently discuss the ‘scarring effects’ the Great Recession has had on young people in Europe. This column tentatively challenges the received wisdom of permanent scarring. Young graduates mitigate some of the negative welfare effects of graduating during bad times by living with their parents for longer.

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