Caldera-Sánchez, Aida , de Serres, Alain, Gori, Filippo, Hermansen, Mikkel, Röhn, Oliver, (2017), “Strengthening Economic Resilience: Insights From The Post-1970 Record Of Severe Recessions And Financial Crises”, OECD, December 2016 No. 20, February
The global financial crisis marked a turning point for the assessment of macroeconomic risks in developed countries. Following a period characterised by positive growth dynamics and overall macroeconomic stability, the 2008-09 economic turmoil served as a powerful reminder that economic fragility can develop beneath the surface of stable macroeconomic conditions, calling into question the adequacy of conventional tools to monitor economic risks and assess longer-term resilience. Economic resilience can be defined as the capacity of an economy to reduce vulnerabilities, to resist to shocks and to recover quickly. It can be strengthened by exploring the role of policies that mitigate both the risks and consequences of severe crises. In the case of risks, this means developing adequate tools to detect the types of vulnerabilities that create the conditions for adverse shocks to turn into crises, and to take actions to stem the build-up of such vulnerabilities before it is too late. In turn, this implies being able to monitor home-grown vulnerabilities, but also the possible spillovers from vulnerabilities arising in other countries that could be transmitted through financial, trade and confidence channels.
Relevant Posts
- Stanislas de Finance, Risto Nieminen, (2016), “Testing the resilience of banking union”, European Added Value Unit PE 558.778, April
- Frecaut, Olivier, (2016), “A National Wealth Approach to Banking Crises and Financial Stability”, IMF Publications, 5 July