Economic Resilience in action now
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COVID-19 is putting economic activity and resilience under pressure around the world, raising a key question: where do policy makers and the economy go from here? We believe that now more than ever, a coordinated policy response is essential given the weaker global economic resilience to begin with, combined with the uncertainty surrounding today's economic shock.
- In the face of a global recession, the framework of economic resilience allows us to understand the ability of countries to absorb shocks
- With none of the Eurozone G7 countries in the top ten most resilient economies, the Euro Area is more exposed to shocks than the US. Global policy coordination is now vital in reinforcing global resilience
- Policy makers will need to resort to unorthodox measures, with the subsequent recovery likely prolonged due to weaker structural economic factors to begin with
- Resilience, among other things, stems from monetary and fiscal space. Countries with weaker balance sheets experience deeper and longer recessions, followed by more protracted recoveries
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