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Tag Archives: Pandemic

To Safeguard Global Financial Stability, Boost the Resilience of Investment Funds

By Tobias Adrian, Antonio Garcia Pascual, Ranjit Singh, and Jay Surti Investment funds were hit hard by the pandemic; their response amplified its adverse impact on financial markets and capital flows. Our brush last year with one of the biggest economic shocks of our lifetimes revealed some fundamental vulnerabilities that could affect global financial stability. Caught up in the financial market turmoil generated by risk averse investors, many investment funds were heavily affected by the...

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Twenty Years After 9/11, New York City’s Resilience Is Tested Once Again

Jason Bram and Joelle Scally As we mourn the tragic losses of the 9/11 attacks twenty years on, we thought it would be appropriate to re-examine the remarkable resilience New York City’s economy has shown over the years—a resilience that is once again being tested by the ongoing COVID-19 pandemic. In this Liberty Street Economics post, we look at how Lower Manhattan, in particular, has changed since that tragedy on a number of dimensions, and use that as a framework to think about how the...

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The Housing Boom and the Decline in Mortgage Rates

Haoyang Liu, David Lucca, Dean Parker, and Gabriela Rays-Wahba During the pandemic, national home values and housing activity soared as mortgage rates declined to historic lows. Under the canonical “user cost” house price model, home values are held to be very sensitive to interest rates, especially at low interest rate levels. A calibration of this model can account for the house price boom with the observed decline in interest rates. But empirically, we find that home values are nowhere...

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Unequal Burdens: Racial Differences in ICU Stress during the Third Wave of COVID-19

Ruchi Avtar, Rajashri Chakrabarti, and Maxim Pinkovskiy A critical risk during the COVID-19 pandemic has been the possibility of the hospital system becoming overwhelmed. COVID-19 not only has killed nearly 2 percent of people with confirmed infections but causes many more who contract it to develop severe complications that are potentially fatal if not treated in an intensive care unit (ICU). As ICU capacity is based on typical needs for intensive care before the pandemic, a surge of...

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Forbearance Participation Declines as Programs’ End Nears

Andrew Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw The Federal Reserve Bank of New York’s Center for Microeconomic Data today released its Quarterly Report on Household Debt and Credit for the second quarter of 2021. It showed that overall household debt increased at a quick clip over the period, with a $322 billion increase in balances, boosted primarily by a 2.8 percent increase in mortgage balances, a 2.2 percent increase in credit card balances, and a 2.4 percent...

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Chart of the WeekHow To Escape The Perils of Fragility

By Olusegun Akanbi, Kenji Moriyama, Keyra Primus Already facing huge development needs, the COVID-19 pandemic is exacerbating the challenges facing fragile and conflict states—a group of currently about 40 countries trapped in cycles of low administrative capacity, political instability, conflict, and weak economic performance. Our new IMF staff working paper, which analyzes the experiences of 196 countries between 1979 and 2018, shines a light on how countries can avoid or break out of this...

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How the Pandemic Widened Global Current Account Balances

By Martin Kaufman and Daniel Leigh عربي, 中文, Español, 日本語, Português, Русский 2020 was a year of extremes. Travel all but ceased for a period. Oil prices wildly fluctuated. Trade in medical products reached new heights. Household spending shifted to consumer goods rather than services and savings ballooned as people stayed home amid a global shutdown. If not for the crisis, global current account balances would have continued to decline. Exceptional policy support prevented a global...

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Who Received Forbearance Relief?

Rajashri Chakrabarti, Jessica Lu, Joelle Scally, and Wilbert van der Klaauw Forbearance on debt repayment was a key provision of the CARES Act, legislation intended to combat the widespread economic losses stemming from the COVID-19 pandemic. This pause on required payments for federally guaranteed mortgages and student loans has provided temporary relief to those affected by the COVID-19 pandemic, and servicers of nonfederal loans often provided forbearances or other relief on request as...

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Drawing Further Apart: Widening Gaps in the Global Recovery

By Gita Gopinath عربي, 中文, Español, Français, 日本語, Português, Русский The global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies. Our latest global growth forecast of 6 percent for 2021 is unchanged from the previous outlook, but the composition has changed. The recovery is not assured until the pandemic is beaten back globally. Growth prospects for advanced economies this year have improved by 0.5 percentage...

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Stepping Up to Meet Low-Income Countries’ Pandemic Recovery Needs

By Christian Mumssen and Seán Nolan   中文, Español, 日本語, Português, Русский Low-income countries have been hard hit by the pandemic. Their large financing needs are only likely to grow as they deal with the crisis and its economic aftermath. The IMF has approved a far-reaching package of support that would expand their access to financial assistance at zero-interest rates, while providing stronger safeguards against taking on debt they cannot handle. For these efforts to succeed, economically...

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