Call for papers: Economics of Recovery from Covid-19

The global economy has been deeply injured by several months of confinement, and the exit from lockdown will be accompanied by a gradual release of restrictions. Economic activity will be required to adapt to new social distancing regulations, and economists struggle to forecast when we will return to pre-crisis output and productivity. Some sectors may be hit harder (transportation, tourism, restaurants, public entertainment, amongst others) and will have to undergo a transformation. Nouriel Roubini affirmed that the pandemic had “delivered the fastest, deepest economic shock in history”, and the IMF managing director Kristalina Georgieva said: “never in the history of the IMF have we witnessed the world economy coming to a stand still.”

Governments, central banks and international bodies have immediately responded with large, often open-ended plans to provide liquidity and subsidies. In the short term, debt relief and capital support can alleviate temporary shocks to companies’ balance sheets. However, protracting these programs without an unbiased cost benefit analysis may start a subsidy war, perpetuate overcapacity in distressed sectors (Bénassy-Quéré, Marimon, Martin, Pisani-Ferry, Reichlin, Schoenmaker, Weder di Mauro (2020)), and maintain a lifeline to malinvestment.

Universidad Francisco Marroquin and the Journal of New Finance are launching an initiative to foster high quality research to discuss how the economy and the financial markets can recover from this crisis. We invite young and senior scholars that want to have an impact in shaping the vision of our university and participating in the policy debate.

The editors encourage submissions regarding theoretical contributions, empirical research, and surveys, which combine rigorous research and thought provoking ideas, on the following topics:

1)The nature of the crisis. While previous crises had an endogenous origin, Covid-19 is an external shock to the economy (See Danielsson, Macrae, Vayanos, Zigrand (2020)). What is the nature of this crisis and what similarities can be gathered from other crises such as the ones we witnessed in 1929 and 2008 amongst others?

2) What economic history can teach. World War I, the Great Depression, World War II, the 2008 Great Recession, and other episodes in human history have experimented different Government responses and policy outcomes. These and other episodes can suggest key lessons on how to promote the most effective recovery.

3) Objectives of recovery. What do we mean by recovery and what objectives should policy makers and private enterprise pursue? Repair private enterprises’ balance sheets and production chains; forester financial stability; allow for sustainable development; invest in common goods and facilities to prevent shocks like Covid-19 (research, healthcare, financial, amongst others), etc. ?

4) Macroprudential, monetary and fiscal policies. A number of mechanisms have been deployed and are ready to intervene (monetary policy, fiscal policies, international financial assistance mechanisms - IMF, World Bank, ESM - new regulations, amongst others).

  • Do we need more credit to facilitate a recovery? (Biggs, Michael and Mayer, Thomas and Pick, Andreas, (2010)).
  • Should central banks throw helicopter money and monetize debt? (Blanchard, Pisani-Ferry (2020))
  • After the 2008 crisis regulators extended liquidity and capital requirements, and central banks started to act as liquidity providers of last reports. How should supervisors and regulators act to guarantee a financial environment that facilitates a sustainable and rapid recovery?
  • How will the crisis affect public and private debt?
  • What recommendations can be drawn from a policy mix perspective? For example, Barthelemy, Sylvain , Binet, Pentecote Jean-Sebastien (2020) study economic recoveries of 276 financial crises and find that government spending does not help activity bounce back, unlike other economic policies.
  • Relationships between healthcare system organization and COVID-19 treatment efficiency.
  • Correlations between the lockdown, CO2 emissions, and climate risk.

5) Microeconomics of recovery. What is the effectiveness of measures such as income and employment protection, social protection, regulation of immigration, and initiative to facilitate reemployment? How will social distancing change operational models and productivity for companies? For example Block, Hoffman, Raabe, Beam Dowd, Rahal, Kashyap, Mills (2020) suggest allowing a strategic reduction of contact (including some social contact with low risk) can increase efficiency of social distancing.

6) Globalization of economy. Will international trade be permanently impacted? What are the risks and opportunities for geographically concentrated production structures? Are we going to observe a re-nationalization of value chains? How will the economics of immigration change ?

7) Financial and economic theory. Is mainstream theory equipped with appropriate tools and models to cope with this crisis? Borio (2012) highlighted a number of analytical challenges for the prevailing paradigms and suggested to explore heterodox alternatives (introducing heterogeneous, incomplete knowledge, disequilibrium analysis, amongst others).

8) Impact on Risk management. How will risk analysis evolve in organizational, and financial systems? What are the challenges in introducing fundamental uncertainty and dynamic risk appetite into modelling? How will assumptions change in quantitative modelling techniques? Is increased stress testing the panacea to filling the gap of standard models?

Successful papers will be published in a Special Issue of the Journal of New Finance. Manuscripts shall be submitted by March 31st 2021, following the journal’s standard submission procedure.


Barthelemy, Sylvain, Binet Marie-Estelle, Pentecote Jean-Sebastien (2020), “Worldwide Economic
Recoveries from Financial Crises Through the Decades”, Journal of International Money and
, Available online 15 April 2020, https://doi.org/10.1016/j.jimonfin.2020.102204

Bénassy-Quéré Agnès, Marimon Ramon, Martin Philippe, Pisani-Ferry Jean, Reichlin Lucrezia,
Schoenmaker Dirk, Weder di Mauro Beatrice, (2020), “Repair and reconstruct: A Recovery
Initiative”, CEPR Policy Portal, 19 April 202 https://voxeu.org/article/repair-and-reconstruct-recovery-initiative

Biggs, Michael and Mayer, Thomas and Pick, Andreas, (2010), “Credit and Economic Recovery:
Demystifying Phoenix Miracles”, SSRN (March 15, 2010), http://dx.doi.org/10.2139/ssrn.1595980

Blanchard Olivier, Pisani-Ferry Jean (2020), “Monetisation: Do not panic”, VOX CEPR Policy Portal,09
April 2020, https://voxeu.org/article/monetisation-do-not-panic

Block Per, Hoffman Marion, Raabe Isabel J., Beam Dowd Jennifer, Rahal Charles, Kashyap Ridhi, Mills
Melinda C. (2020), “Social network-based distancing strategies to flatten the COVID 19 curve in a
post-lockdown world”, arXiv:2004.07052

Borio Claudio (2014), “The financial cycle and macroeconomics: What have we learnt?”, Journal of
Banking & Finance, August 2014, https://doi.org/10.1016/j.jbankfin.2013.07.031

Danielsson Jon, Macrae Robert, Vayanos Dimitri, Zigrand Jean-Pierre, (2020), “The coronavirus crisis is
no 2008”, VOX CEPR Policy Portal, 26 March 2020, https://voxeu.org/article/coronavirus-crisis-no-2008