Economic Resilience: What Role for Policies?

Abstract

The global financial crisis highlighted the importance of strengthening the resilience of our economies to adverse shocks. In this paper, we take stock of studies carried out primarily within, but also outside the OECD, to better understand the role of macroeconomic and structural policies in spurring or mitigating the vulnerabilities that can lead to costly shocks, as well as the role of policies in mitigating the shock impact and speeding the recovery. Then we offer tentative insights on how policies can be geared to address vulnerabilities early on, mitigate the impact of shocks and speed recoveries, as well as highlight possible trade-offs that exist across policy areas.

Understanding the Linkages Between Financial Markets and Sustainable Economic Development

“…The step towards a more integrated approach and systems-based view of policymaking marks an advance from narrow agendas focusing on single risk drivers and narrowly defined vulnerability indicators. Policy implications of this approach most prominently concern "buffering capacity" (Hallegatte, 2014;Caldera-Sanchez et al, 2016), "risk-informed development" (Opitz-Stapleton et al, 2019), or a "risk and resilience framework" (United Nations, 2021). The first two of these approaches are relatively limited and technocratic.…”

Did COVID-19 affect rural households’ subjective well-being? A social survey from rural China

“…[ 34 ] regard resilience as the economic ability to minimize welfare losses and enhance economic development potential. To minimize the welfare loss of an economy, it is necessary to control economic fragility and work hard to reduce this fragility [ 35 ] regard resilience as the ability of individuals, communities, or nations to reduce vulnerability, resist shocks, and recover quickly. Drawing on the above definitions, this paper defines “income resilience” as the ability of residents’ income to respond to shocks or risks and gradually return to its previous growth path, which is an important aspect of measuring income stability.…”

The role of regional competitiveness in shaping the heterogeneous impact of the Great Recession

“…They can cushion the impact of shocks, strengthening the resistance of economies, and at the same time affect the way in which economies recover from a shock. In this context, policies regarding unemployment insurance, employment protection legislation, wage setting institutions, active labour market policies, minimum wages, may be very useful to reduce regional disparities (Caldera Sánchez, Rasmussen, & Röhn, ). In fact, they shape two of the major mechanisms of adjustment, that are price flexibility and migration.…”