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Tag Archives: Pandemic

Time is Ripe for Innovation in the World of Sovereign Debt Restructuring

By Peter Breuer and Charles Cohen 中文, Español, Français, Português, Русский  When corporations have too much debt and need to restructure i, creditors often end up exchanging bonds or loans for stocks. They trade the guaranteed payout of a fixed-income investment for an equity position whose return depends on the company’s future results. In other words, investors accept to share risk. Could a similar mechanism be applied when a sovereign nation has to restructure its debt, tying payouts to...

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Continued Strong Policy Action to Combat Uncertainty

By Kristalina Georgieva Español, Français, 日本語, Português, Русский  As G20 leaders meet virtually this week, the global economy faces a critical juncture. Countries have started to climb back from the depths of the COVID-19 crisis. But the resurgence in infections in many economies shows just how difficult and uncertain this ascent will be. The good news is the significant progress on vaccine development. While there are many caveats, this raises hopes of vanquishing the virus that has taken...

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Chart of the WeekIMF Lending Lifeline: Addressing Urgent Financing Needs Brought on by the Pandemic

IMF Blog  Español, Français, Português The human toll and global economic disruption from the COVID-19 pandemic triggered unprecedented demand for financing. More than 1/3 of the IMF’s membership have received relief from the Fund. Since the onset of the pandemic, the IMF has responded rapidly and decisively to meet urgent and exceptional demand for financial assistance from its membership. Since March 2020, 70 members, including many low-income countries, have received financial support...

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How Has COVID-19 Affected Banking System Vulnerability?

Kristian Blickle, Matteo Crosignani, Fernando Duarte, Thomas Eisenbach, Fulvia Fringuellotti, and Anna Kovner The COVID-19 pandemic has led to significant changes in banks’ balance sheets. To understand how these changes have affected the stability of the U.S. banking system, we provide an update of four analytical models that aim to capture different aspects of banking system vulnerability. The four models, introduced in a Liberty Street Economics post in 2018 and updated in a...

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Together Again: Physical Distancing on the Decline

Era Dabla-Norris, Frederico Lima, and Hibah Khan Earlier this year, stringent lockdowns and uncertainty about the severity and transmission of COVID-19 led to the widespread adoption of physical distancing measures across the world. However, as COVID-19 outbreaks began to ebb and lockdowns eased over the summer, measures tracking mobility, such as Google Community Mobility Reports, showed that adherence to keeping our distance from others began to relax. Our ongoing research finds that these...

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Chart of the WeekData Disruption: The Impact of COVID-19 on Inflation Measurement

By Marshall Reinsdorf Lockdowns, working from home, and physical distancing caused people to spend larger shares of their household budgets on food and housing, while fewer people bought nonessentials, like airline tickets and clothing. And with incomes down as millions have lost their jobs, spending on nonessential items will likely remain depressed. The consumer price index (CPI) does not reflect these abrupt changes in spending patterns because the CPI weights are not continuously updated....

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Has the Pandemic Reduced U.S. Remittances Going to Latin America?

Matthew Higgins and Thomas Klitgaard Workers' remittances—funds that migrants send to their country of birth—are an important source of income for a number of economies in Latin America, with the bulk of these funds coming from the United States. Have these flows dried up, given the COVID-19 recession and resulting unprecedented job losses? We find that remittances initially faltered but rebounded in the summer months, performing better than during the last U.S. recession despite...

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Chart of the WeekThe Crisis is Not Over, Keep Spending (Wisely)

By Oya Celasun, Lone Christiansen, and Margaux MacDonald The pandemic-induced economic crisis is set to leave deep scars. Human capital erosion from prolonged high unemployment and school closures, value destruction from bankruptcies, and constraints on future fiscal policy from elevated public debt top the list. Groups that were already poor and vulnerable are set to see the largest setbacks. Swift and unprecedented action by policymakers, including among the Group of Twenty (G20) advanced...

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How COVID-19 Will Increase Inequality in Emerging Markets and Developing Economies

By Gabriela Cugat and Futoshi Narita Emerging markets and developing economies grew consistently in the two decades before the COVID-19 pandemic hit, allowing for much-needed gains in poverty reduction and life expectancy. The crisis now puts much of that progress at risk while further widening the gap between rich and poor. Despite the pre-pandemic gains in poverty reduction and lifespans, many of these countries have struggled to reduce income inequality. At the same time, they saw...

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Chart of the WeekFirms’ Environmental Performance in Times of Crisis

By Pierre Guérin, Fabio Natalucci, Felix Suntheim عربي, 中文, Español, Français, 日本語, Português, Русский  Leaders are often called upon to “rise to the challenge” in times of crisis. As firms and their leaders rise as best they can amid the ongoing health and economic crises, yet another crisis lies on the horizon. A looming environmental crisis, obscured by the exigency of the pandemic, requires action be taken by firms (and others). So how will business leaders and companies respond? Our...

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