Hartar Blog

Will COVID-19 Remake the World?  - Dani Rodrik (PS) Navigating the Pandemic Trilemma  - Harold James (PS) Letter to governments of the G20 nations  - VoxEU.org Mapping the COVID-19 Recession - Ken Rogoff (PS) Will We Flunk Pandemic Economics?  - Paul Krugman (NYTimes) Beating the Coronavirus Is the Best Stimulus  - Frydman and Phelps (WSJ) A green recovery  - Dirk Schoenmaker (Bruegel) When Will the Pandemic Cure Be Worse Than the Disease?  - Peter Singer and Michael Plant (PS) At War With a Virus  - Richard N Haass (PS) The Case for Mandatory Face Masks  - Shang-Jin Wei (PS) Rescuing the labour market in times of COVID-19: Don’t forget new hires!  - VoxEU.org Lockdown Can’t Last Forever. Here’s How to Lift It.   NYTimes.com The United States Needs a ‘Smart Quarantine’ - NYTimes.com Fighting COVID-19 in Europe and Central Asia: Saving Lives versus Protecting Jobs? - World Bank Blogs To fight the COVID pandemic, policyma...

Optimal Mitigation Policies in a Pandemic  - Jones, Philippon and Venkateswaran  COVID-19 economic crisis: Europe needs more than one instrument  - VoxEU.org Crashed to Corona 3: the Fed beyond Swap Lines  - Adam Tooze The EU must be forged in this crisis or it will die - Zingales (FT.com) Compliance with COVID-19 Social-Distancing Measures in Italy: The Role of Expectations and Duration Briscese et al (NBER WP) Prepare for large wage cuts if you are younger and work in a small firm - VoxEU.org The ESM can finance the COVID fight now  - VoxEU.org Internationalizing the Crisis - Joseph Stiglitz (PS) The European Commission’s SURE initiative and euro area unemployment re-insurance - VoxEU.org The economics of wage compensation and corona loans: Why and how the state should bear most of the economic cost of the COVID lockdown - VoxEU.org Do not count on a fast global economy bounceback  - Gavyn Davies (FT) How many people really die from Covid-19? Lessons ...

Human Mobility Restrictions and the Spread of the Novel Coronavirus (2019-nCoV) in China - Fang, Wang and Yang (NBER WP) COVID-19 Economic Stimulus Index  - Elgin, Basbug and Yalaman\ Fewer deaths in Veneto offer clues for fight against coronavirus - FT.com Whack-a-mole: the long run virus - John Cochrane COVID-19: OMT is second-best, but still welcome  - VoxEU.org Sharing the fiscal burden of the crisis: A Pandemic Solidarity Instrument for the EU  - VoxEU.org EU solidarity in exceptional times: Corona transfers instead of Coronabonds  - VoxEU.org Covid Economics: Social Distancing and the Relevant Benefits of Cost-Benefit Analysis - Lever (ProMarket) Global Uncertainty Related to Coronavirus at Record High - Ahir, Bloom and Furceri (IMF Blog) Africa in the News: Impact of COVID-19 on African Economies  - Brookings Swiss lead way with crisis loans to small businesses - FT.com Hong Kong Faces Delays in Giving Cash Away With Virus Hitting Econ...

Daily list of links Data needs for shutdown policy - James Stock Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages? - Guerrieri, Lorenzoni, Straub and Werning ESM loans or Coronabonds: A legal analysis from the German perspective - VoxEU.org Making the Fight against the Coronavirus Pandemic Sustainable  - Group of German Scientists Preparing for post-pandemic financial reckoning  - Patrick Honahan Why We Can Be Optimistic About the Long-Term Impact of the “Covid Economy”  - Wojciech Kopczuk (Pro Market) Will inflation make a comeback after the crisis ends?  VoxEU.org The responses of consumption and prices in Japan to the COVID-19 crisis and the Tohoku earthquake - VoxEU.org How do countries differ in their response to the coronavirus economic crisis?  Ricardo Reis Remittances in times of the coronavirus – keep them flowing - World Bank Blogs COVID-19: Forecasting with Slow and Fast Data  - St Louis Fed The G...

Daily list of Links: The Case for Universal Cloth Mask Adoption - Abaluck et al. How do we value a statistical life? - Tim Harford (FT) COVID-19 Response White Papers  - Center for Ethics Harvard Univ. Notes on the Coronacoma - Paul Krugman (NYTimes) The Value of Opacity in a Banking Crisis - Anderson and Copeland (NY Fed) The asset markets and the coronavirus pandemic - VoxEU.org Fed's bond-buying world records in responding to COVID-19 drew on planning, training, and infrastructure - PIIE Europe should seize oil price windfall to fund its pandemic response - PIIE Coronavirus and financial stability - VoxEU.org The dollar and international capital flows in the COVID-19 crisis - VoxEU.org Some micro/macro insights on the economics of coronavirus - VoxEU.org Why testing offers a way to end the lockdowns - FT.com Latin America faces both the pandemic and its economic consequences - World Bank Blogs The Danger of No Antitrust Enforcement: How a Merger Led to the US Ventila...

Daily list of links: Not One Emerging Market Financial Crisis, but Many - Brad Setser R < 1 as an Economic Constraint - Eric Budish Supply chain contagion waves - Baldwin and Freeman (VoxEU.org) Tax relief in a time of crisis - World Bank Blogs Yes, medical gear depends on global supply chains. Here's how to keep them moving - PIIE Shore up global transport to defeat the COVID-19 pandemic  - World Bank Blogs The EU needs an independent public health authority to fight pandemics such as the COVID-19 crises - VoxEU.org Some micro/macro insights on the economics of coronavirus - VoxEU.org Coronanomics 101 - Barry Eichengreen (PS) Reviving the potency of monetary policy with recession insurance bonds - Coronado and Potter (PIIE) Economic Policies for the COVID-19 War  - IMF Blog Economic Implications of COVID-19 - Becker Friedman Institute Responding to crisis with digital payments for social protection: Short-term measures with long-term benefits - World Bank Blogs ...

Daily list of links "Whatever it takes." Getting into the specifics of fiscal policy to fight COVID-19  - Olivier Blanchard (PIIE) The importance of an expanded U.S. Unemployment Insurance system during the coronavirus recession  - Arindrajit Dube The Priority for the Social-Distancing Period - Michael Spence (PS) Following the Science or a National Scandal - Simon Wren-Lewis Will the Economic Strategy Work?  - Jean Pisani-Ferry (PS) Why are some stock markets in Asia less affected by coronavirus?  - Bruegel How long can we expect temporary layoffs to remain temporary?  Brookings The Two Pandemics  - Robert Shiller (PS) COVID-19: What Do FREDcast Users Think about Economic Growth? - St Louis Fed Blog Building effective short-time work schemes for the COVID-19 crisis - VoxEU.org COVID- 19, inequality, and gig economy workers - VoxEU.org Coping with a dual shock: COVID-19 and oil prices - VoxEU.org 'Immunity passports' could speed up return to work after...

Daily links on COVID-related content The West’s COVID-19 Learning Curve  - Daniel Gros (PS) Capitalism’s Triple Crisis  - Mariana Mazzucato (PS) How COVID-19 is laying bare inequality  - Bruegel The COVID-19 Solidarity Test  - Kemal Dervis (PS) South Asia shows new spirit of collaboration to fight COVID-19 pandemic  - World Bank Blogs Is COVID-19 triggering a new emerging-market crisis?  - Bruegel The Coronavirus Is the Biggest Emerging Markets Crisis Ever  - Adam Tooze (Foreign Policy) Emerging market central banks embark on radical stimulus policies  - FT.com Monitoring Real Activity in Real Time: The Weekly Economic Index - NY Fed Oxford COVID-19 Government Response Tracker - Oxford University How Many Jobs Can be Done at Home? - Dingel and Neiman COVID, Fed swaps and the IMF as lender of last resort  - Levy Yeyati (VoxEU.org) The Federal Reserve can do more for small businesses  - Brookings A timeline of central bank response...

Daily links to COVID-Economics related content OECD Policy Tracker  - OECD Where does all the heterogeneity come from?  - Tyler Cowen The Stimulus Package Is Too Expensive and Poorly Targeted  - Seru and Zingales How Coronavirus Is Shaking Up the Moral Universe  - Jon Authers Manufacturers Seek U.S. Help in Deciding Where to Ship Scarce Medical Goods  - WSJ.com QE is not helicopter money – and yet it is useful  - VoxEU.org Trump is missing the big picture on the economy  - Larry Summers Creating an EU ‘Corona Panel’: Standardised European sample tests to uncover the true spread of the coronavirus  - Daniel Gros VoxEu.org How widespread is coronavirus in New York? We need to know  - VoxEU.org EU backs bank rule delay to spur crisis lending  - FT.com Go-it-alone eurozone ‘coronabonds’ are worth the risk  - Wolfgang Munchau Does coronavirus herald capital controls? - FT.com The Road Back to Normal: More, Better Testing - WSJ.com The ...

Daily links about the economic consequences of COVID including some proposals for policies COVID-19: China's exports of medical supplies provide a ray of hope - Chad Bown (PIIE) COVID-19 crisis: Fiscal policy should lead and the Bank of England should follow for the duration of the crisis - VoxEU.org How business fared in its coronavirus quarter - FT.com What Will Be the Economic Impact of COVID-19 in the US? Rough Estimates of Disease Scenarios  - Atkeson (NBER WP) The Case for Lockdown: in Italy’s Lombardy, It Can Reduce Covid-19 Potential Fatalities from 160,000 to 25,000  - Carlo Favero Corona bonds – great idea but complicated in reality - Lorenzo Bini Smaghi (VoxEU) Weekend reading: Supporting and protecting workers during the coronavirus recession edition - Equitable Growth Britain needs to be crystal clear about belated virus strategy - Martin Wolf (FT) Lessons from Italy’s Response to Coronavirus - HBR.org Testing People and Targeted Isolation: How to Save More Li...

Daily links about the economic consequences of COVID including some new proposals for policies: Cross-country correlation analysis for research on COVID-19 - VoxEU.org Viral protectionism in the time of coronavirus - World Bank Blog COVID-19: The economic policy response - VoxEU.org Coronavirus and global finance - FT.com ECB orders banks to freeze dividends and share buybacks - FT.com The economic impact of coronavirus on UK businesses: Early evidence from the Decision Maker Panel - VoxEU.org Future imperfect after coronavirus - VoxEU.org How Africa’s Economies Can Hedge Against COVID-19 -  Ibrahim Assane Mayak Economic Policies to Combat COVID-19 in Africa - Celestin Monga Does India have enough doctors ? - Brookings Awakening in the post-pandemic world - Dennis J Snower, Brookings The IMF and COVID-19 - IMF Creating an EU ‘Corona Panel’: Standardised European sample tests to uncover the true spread of the coronavirus - VoxEU.org Coronavirus Pushes Some Emerging Markets to...

New daily list of links to articles about the economic consequences of COVID including some academic papers as well as proposals for policies: Macroeconomic nowcasting in times of Covid-19 crisis: On the usefulness of alternative data - Econbrowser Key Economic Facts About COVID-19 - Becker Friedman Institute After its COVID-19 emergency, Europe should issue joint recovery bonds - Jacob Funk Kirkegaard (PIIE) A user guide to COVID-19 - VoxEU.org Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu - Correia, Luck and Verner Longer-run economic consequences of pandemics - Jorda, Singh and Taylor Bank of England warns of ‘very sharp’ economic downturn - FT.com Short-Term Yields Go Negative in Scramble for Cash - WSJ.com The coronavirus crisis is no 2008 - VoxEU.org The Helicopters Are Coming - Willem Buiter IMF SDR: A Key tool for attacking COVID-19 in developing countries - Brookings Brexit not immune to Coronavirus - Brookings The Ra...

Additional links about the economic consequences of COVID including some new proposals for policies: Fault lines in fiscal-monetary policy coordination - VoxEU.org Coronavirus creates new role for US unemployment insurance - FT.com Getting COVID-19 financial relief to millions of Americans in need requires a multichannel strategy - PIIE EU solidarity in fighting COVID-19 - VoxEU.org Introducing World vs Virus, a World Economic Forum Podcast - World Economic Forum Policy Responses to COVID-19 , IMF The new wartime economy in the era of coronavirus - FT.com COVID-19: A euro area safe asset and fiscal capacity are needed now - VoxEU.org Coronavirus and the politics of a common fiscal instrument - Bruegel Nine eurozone countries issue call for ‘coronabonds’ - FT.com A Coordinated Response to COVID-19 - Lee Jong-Wha Where is the US government getting all the money it’s spending in the coronavirus crisis? - Brookings Eurozone leaders should use their existing tools - FT.com What ...

Over $30 million down the drain — how it happened Coca-Cola’s decades of dominance would soon end. Through the 1940s and ’50s, it held more than 60% of the market. Pepsi had been around but they'd floundered, going bankrupt several times while attempting to sink their teeth into the market. However, by the 1970s, Pepsi had found its stride after several hit marketing campaigns. Where Coke’s primary demographic was older adults, Pepsi was winning over an expanding, younger demographic. By 1980, Pepsi was only trailing coke by 3%. This, unsurprisingly, made Coke very uncomfortable. They then did what one should never do when under pressure: overreact. Source: pic via Adage They changed the original recipe. But they hadn’t made this decision without favorable data. So what went wrong? The Crack in the Process Months earlier, Coca-Cola had begun “Project Kansas.” It sounds like a nuclear experiment but it was just a testing project for the new flavor. In individual surveys, th...

Additional links about the economic consequences of COVID including some new proposals for policies: A Greater Depression? - Nouriel Roubini Coronavirus Data Gaps and the Policy Response to the Novel Coronavirus - James H Stock European bank regulators aren’t yet doing what it takes - I.Angeloni, VoxEU.org Coronavirus: the economic cure - FT.com ‘Broad support’ for using eurogroup bailout fund in virus battle - FT.com U.S. economic policy principles for confronting the coronavirus recession - Equitable Growth Flattening the COVID-19 Curve in Developing Countries - Ricardo Hausmann Banks in pandemic turmoil - Nicolas Veron The robots are ready as the COVID-19 recession spreads , Brookings How our cities can reopen after the COVID-19 pandemic , Brookings Captured Western Governments Are Failing the Coronavirus Test , Luigi Zingales This pandemic is an ethical challenge , Martin Wolf, FT.com ‘Great liquidity crisis’ grips system as banks step back - FT.com The ESM must help again...

Additional links about the economic consequences of COVID including some new proposals for policies. Covid Perpetual Eurobonds: Jointly guaranteed and supported by the ECB , VoxEU.org Federal Reserve announces extensive new measures to support the economy  Federal Reserve Covid-19’s Economic Pain Is Universal. But Relief? Depends on Where You Live . NYTimes How long will the coronavirus slump last? - FT.com COVID-19 and the US economy: FAQ on the economic impact & policy response - Jay Shambaugh This Time Truly Is Different - Carmen Reinhart The economic (and political) effects of this coronavirus pandemic - Simon Wren-Lewis We may have to prepare for a longer coronavirus crisis - Laurence Boone Artificial intelligence in the fight against COVID-19 - Georgios Petropoulos Rapidly identifying workers who are immune to COVID-19 and virus-free is a priority for restarting the economy - VoxEU.org Coronavirus: can the ECB’s ‘bazooka’ avert a eurozone crisis? - FT.com EU li...

Links to additional articles about the COVID effects and potential economic policies The case for a coordinated COVID-19 response: No country is an island , VoxEU.org Europe needs a new scale of stimulus — and cash not credit -  Wolfgang Munchau, FT.com How to prevent a covid-19 slump, and protect the recovery - The Economist Italian debt is sustainable - Olivier Blanchard When “Whatever It Takes” Isn’t Enough - Willem Buiter How Asia’s Life Insurers Could “Shelter-In-Place” - Brad Setser EU plans fiscal firepower boost to tackle coronavirus fallout - FT.com Real-time data show virus hit to global economic activity - FT.com Coronavirus threatens $32tn of Asia corporate debt - FT.com Only Multilateralism Can Save Us - Anne Krueger Fiscal Policy Still MIA - Tim Duy Kurzarbeit: a German export most of Europe wants to buy - FT.com Social Distancing Makes Sense Only With Extraordinary Fiscal Stimulus - Peter Orszag The ECB Must Finance COVID-19 Deficits - Paul de Grauwe The ...

Some recent links on economic consequences of COVID Germany tears up fiscal rule book to counter coronavirus pandemic  FT.com Coronavirus: the moment for helicopter money  - Martin Sandbu, FT.com EU limits on medical gear exports put poor countries and Europeans at risk  - Chad Bown, PIIE Containing the economic nationalist virus through global coordination - Adam Posen, PIIE A proposal for a Covid Credit Line  - VoxEU.org Four types of labor and the epidemic - Branko Milanovic Fiscal Policies to Protect People During the Coronavirus Outbreak - IMF Blog Keeping Business Alive: The Government as Buyer of Last Resort  - Saez and Zucman Flattening the Pandemic and Recession Curves  - Pierre Olivier Gourinchas What Should a Fiscal Response to a COVID-19 Outbreak Look Like? - Jay Shambaugh Coronavirus and macroeconomic policy  - Fornaro and Wolf Monetary and Financial Stability During the Coronavirus Outbreak   - Tobias Adrian Mitigating the COV...

Several indicators are signaling an increase in the probability of a recession. Most of these indicators are variables that have shown to be statistically leading the recession but they cannot always be seen as the cause of one (for example, an inverted yield curve) In the search of a cause for a recession we typically look for imbalances. One that has mattered in the past is asset price bubbles. Standard valuation metrics of the stock market suggest that in the last quarters the market has gotten cheaper and moved further away from bubble territory. The Financial Times reports that US companies dividend yield is now larger than the interest rates on a 30 year government bond (see image below). This is not at all a new phenomenon in Europe where the dividend yield has been larger than the interest rate on bonds for years and is now reaching record levels. A good way to summarize the improvement in the valuation of stocks is to calculate the ex-ante risk premium. The image below shows t...

Economics textbooks use a definition of money as an asset  that can be used as a means of payment , that constitutes a unit of account and serves as a store of value . This definition is being used often in debates about new forms of digital money and payments (including cryptocurrencies). I would like to argue that this characterization of money is a) not a definition b) not a very useful one to compare alternative forms of payment c) fails to understand how digital payments and new technologies have changed the nature of money Let's deconstruct the "definition" to see what is wrong with it.  Unit of account and store of value Prices and wages are denominated in a unit of account that we identify with money or the currency.  This one is quite straightforward but we cannot rule out a world with multiple units of accounts. There are countries where we have several currencies being used in parallel which does not stop people from using different forms of money. At a much s...

Libra, the cryptocurrency backed by Facebook (and the other members of the Libra association) was announced yesterday. The web site  and the white paper  refer to the new currency as a stable currency: "Libra is designed to be a currency where any user will know that the value of a Libra today will be close to its value tomorrow and in the future."  The stability is guaranteed by the intrinsic value of the coin, a result of the assets that back the value of the currency. These assets are called the "Library Reserve".  The white paper refers to the similarities of this mechanism and the currency board that some currencies with fixed exchange rates use: "...the mechanics of interfacing with our reserve make our approach very similar to the way in which currency boards (e.g., of Hong Kong) have operated. Whereas central banks can print money at their own discretion, currency boards typically only print local currency when there are sufficient foreign exchange asse...