Economics & Finance

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    Covid-19 is bad news for foreign direct investment, but there may be a silver lining

Covid-19 is bad news for foreign direct investment, but there may be a silver lining

Just over a year ago, InvestChile – the South American country’s foreign direct investment (FDI) promotion agency – welcomed 300 foreign investors of 21 nationalities in Santiago. In a two-day event, they attended plenaries, workshops and over 200 meetings including with President Piñera, advancing over 7 billion dollars in potential projects. Fast-forward to today, and the view from Chile […]

The Covid-19 recession is creating a crisis of inequality

The Covid-19 pandemic is turning into a global recession – probably the biggest drop in economic activity since the Great Depression of the 1930s. The latest forecasts put UK and US GDP both down by about 10% in the second quarter of 2020 (40% on an annualised basis). GDP is an important measure of economic wellbeing, but the key […]

It’s time for a recovery plan

Firms in every country are reeling from the inability to do business as usual. To make things worse, many sectors see collapsed demand and economic uncertainty stretching months, if not years. Governments rightly focus on dealing with the health crisis first, and only then on the recovery of the economy once the immediate danger of the pandemic is over.

In […]

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    Eurobonds (or coronabonds) would not be costly for Northern euro area countries

Eurobonds (or coronabonds) would not be costly for Northern euro area countries

There are currently heated debates on eurobonds, partly with the name coronabonds. This topic is also on the agenda again for the next EU and euro area meetings. Some countries, which have to pay relatively high interest rates on their government debt, demand the issuance of such bonds, most notably Italy, understandably assuming that such bonds would reduce their […]

April 16th, 2020|COVID-19, Finance|3 Comments|

The Covid-19 crisis reveals how much we value old age

The Covid-19 pandemic has hit the older population more than other age cohorts, as their weaker immune system makes it harder to fight diseases and infection. Although all age groups are at risk of contracting the virus, older people face significant risk of developing a severe illness. Of all coronavirus-related deaths so far, 95% occurred in those older than 60 […]

How investor pressure leads to higher dividend payouts

UK dividends paid out in 2019 reached nearly £100bn, an all-time high, with nine out of ten sectors raising dividend payouts (Darbyshire, 2020). At the same time, there have been numerous reports of companies such as Carillion, Thomas Cook, Woodford Investment Management, and BHS paying dividends that were unwarranted by underlying financial health.

Following the unprecedented effects of the Covid-19 […]

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    The Covid-19 impact on fintech: now is the time to boost investment

The Covid-19 impact on fintech: now is the time to boost investment

While the coronavirus pandemic sweeps the entire world, governments’ response to the international health crisis has led the global economy to a standstill. Extensive lockdowns and social distancing measures are leading to massive unemployment spikes and numerous businesses are already seeing dramatic loss of revenue and struggling to maintain their operations.

In the US, unemployment rates rose to 4.4% in […]

April 13th, 2020|COVID-19, Finance|1 Comment|

How to restart the economy after Covid-19

The Covid-19 crisis has brought many sectors of the global economy to a halt. Firms in these sectors have no revenues while the lockdown is in place, yet they still pay salaries, rents, and debt interest. These expenditures are often deferred – including through government-sponsored programs – but rarely waived. The hiatus increases financial pressure on the firms, as […]

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    Adjusting Covid-19 expectations to the age profile of deaths

Adjusting Covid-19 expectations to the age profile of deaths

The coronavirus disease (Covid-19) originated in Wuhan, China in late 2019. By early April 2020, this infectious respiratory disease had been identified in over one million people worldwide, with nearly 60,000 attributed deaths, and with an expectation that millions will eventually die from the disease. Coverage of the resultant pandemic has focused on three main measures: the number of […]

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    Covid-19: severe lockdowns, joint fiscal response, and coronabonds

Covid-19: severe lockdowns, joint fiscal response, and coronabonds

The European economy is experiencing a severe economic contraction as a result of the coronavirus lockdowns in place across most countries. We invited our European panel to express their views on Europe’s economic policy response to the Covid-19 crisis: first, on whether the economic benefits from lockdowns are likely to outweigh their costs over the medium term; and second, on the […]

When will the coronavirus pandemic peak?

The 2019–20 coronavirus pandemic is an ongoing pandemic of coronavirus disease (Covid-19), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). We have carried out some analysis of the daily data on the number of new cases of Covid-19 and the number of new deaths attributed to it for 191 countries as reported to the European Centre for Disease […]

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    The coronavirus crisis will test UK business resilience to its limit

The coronavirus crisis will test UK business resilience to its limit

Coronavirus has taken a heavy toll on businesses and economic activity across the UK. Firms that were forecasting growth and planning to recruit only a couple of months ago are now shutting their doors for an indefinite period, and many will look to furlough at least some of their staff.

Chambers of Commerce are uniquely positioned to respond to this […]

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    Coronavirus has made extending the Brexit deadline a necessity

Coronavirus has made extending the Brexit deadline a necessity

On 12 March, the FTSE 100 (index of the 100 largest UK companies) dropped 10.9% – its highest single-day fall since 1987. This follows flat GDP growth in the fourth quarter of 2019, with almost certain decline expected in the first quarter of 2020. The spread of Covid-19 means investors are extremely pessimistic about the outlook for the economy.

And if a […]

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    How economists view the policy response to the Covid-19 crisis so far

How economists view the policy response to the Covid-19 crisis so far

Just two weeks ago, the likelihood of a major US recession as a consequence of the public health challenge was still in doubt. In the past few days, the number of claims filed for unemployment insurance hit record levels; the total number of Covid-19 cases in the United States went past 100,000, already substantially higher than the totals in […]

The economics of coronavirus

The coronavirus (Covid-19) pandemic is first and foremost one of the gravest health crises of the past hundred years, threatening to generate millions of premature deaths worldwide. But it also represents a major – and unusual – challenge for economic policymakers.

In most economic downturns, the appropriate policy response is qualitatively straightforward, if sometimes difficult to calibrate or implement. For […]

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    Comparing the coronavirus crisis to 2008 is inevitable, but they’re quite different

Comparing the coronavirus crisis to 2008 is inevitable, but they’re quite different

Coronavirus is having a strong impact on the world economy. What about the financial system? Is a systemic financial crisis likely, perhaps along the lines of the crisis 12 years ago in 2008, or even the Great Depression of the 1930s?

There are certainly similarities: widespread bankruptcies, liquidity shortages, large losses and some financial institutions may fail. Still, that in itself does […]

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    Covid-19: We shouldn’t give priority to sustaining the GDP over the wellbeing of the people

Covid-19: We shouldn’t give priority to sustaining the GDP over the wellbeing of the people

We are in a very difficult situation. But I do believe that if we handle it right we can come out of this better than we went into it. We can come out of it with a society in which people are caring more for each other and in which they are taking better care of themselves.

So, let me […]

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    Covid-19: the underlying issues affecting the UK’s food supply chains

Covid-19: the underlying issues affecting the UK’s food supply chains

The Covid-19 outbreak encompasses health risks and difficulties to our food chains. Above-normal demand and hoarding of some basic products have affected the normal operation of the food supply chain, resulting in empty supermarket shelves and forcing some retailers to impose constraints on the quantities sold. These impacts have increased food insecurity for the most vulnerable groups in the […]

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    We only changed our behaviour when we saw Covid-19 at our doorstep

We only changed our behaviour when we saw Covid-19 at our doorstep

The new COVID-19 is an extremely contagious virus (having about three times the transmission rate of the flu), and its spread depends on social contact. For an individual living a normal life, the probability of infection is extremely high (as individuals exhibiting no symptoms tend to go untested). If a sizeable share of the population becomes infected, not only can it […]

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    To survive the COVID-19 crisis, the euro area can’t go back to business as usual

To survive the COVID-19 crisis, the euro area can’t go back to business as usual

The Covid-19 crisis has brought the European economy to a standstill. More and more states are taking drastic measures to contain the spread of the virus, while nobody can predict how long these exceptional circumstances will persist. As with any other crisis, we are once again learning that the future is fundamentally uncertain, and that people do not behave […]