In response to the worldwide financial crisis, many countries have put together fiscal stimulus packages of substantial size comprising increases in public spending, tax cuts, and transfers to the private sector. These packages vary considerably in respect to size, composition, and timing....

Since the economic downturn started, exports have fallen dramatically and rapidly. One reason for this is the importance of vertical specialization, where the drop in demand for the final good induces a domino effect on to demand for intermediate inputs. Hence, the strong collapse in exports in...

This lecture is a tour d'horizon of the financial crisis aimed at extracting lessons for future financial regulation. It combines normative recommendations based on conventional welfare economics with positive assessments of the kind of measures likely to be adopted based on political economy...

Appropriate policies to address the problem of toxic assets should act as automatic stabilizers, so that institutions who toxic assets turn out to be worthless receive more public support than institutions whose toxic assets have value. Furthermore, such policies should be frugal in their...

It is neither likely nor desirable for central banks to exit from unconventional monetary policies in the near future. However, it is important that central banks develop an exit strategy, evaluate the merits of new and old monetary policy tools and communicate with the public so as to maintain...

With interest rates in most developed countries close to zero, it is not possible for monetary policymakers to stimulate the economy by reducing interest rates. As a result the economy is unusually sensitive to the possibility of deflation, and thoughts turn to fiscal policy in order to...

The German scheme of creating national SPV-loopholes for structured assets is a relatively expensive way to 'buy time' for troubled banks and runs counter to the task of a more uniform and transparent international regulatory framework. It also does not provide a major incentive for a...

The ongoing global financial crisis has been preceded by a steady rise in global current account imbalances. Recently, in the course of the global recession, global imbalances have declined, albeit without having disappeared completely. As the outlook for global growth gets brighter, it is...

Assessing the quantitative impact of the fiscal packages which have been adopted in the current financial crisis is extremely difficult. The studies which are presented in this paper show wide differences, both for short-term and for medium-term multipliers. Moreover, multipliers which are...

Risk evaluation is crucial for practitioners as it allows them to make better investment decisions. However, the recently witnessed financial turmoil has demonstrated the inadequacy of many models for preventive risk evaluation. In particular, it is now evident that new methods are needed to...