14 Apr 2020

Research-based policy advice in the corona crisis - the SAFE Pandemic Policy Team

International team of financial economists around SAFE proposes European aid program

In the publication series "Corona and financial stability", a team of international financial economists around the Leibniz Institute SAFE deals with the effects of the corona virus on financial stability. In three policy publications so far they have concluded that, in addition to national measures, a coordinated approach at the European level is essential in order to ensure confidence in the stability of the financial markets.

In SAFE Policy Letter No. 78, the experts describe the consequences of the health measures on economic activities and how these will affect financial markets. In SAFE Policy Letter No. 79, the team discusses the asymmetric national support programs for companies. In the third paper of the series, the economists propose the establishment of a European Pandemic Equity Fund (EPEF). The current debt-based support programs are not sufficient and cause problems, in particular for small and medium-sized enterprises; an equity-like financing structure would be a far better approach.

The Pandemic Policy Team includes Arnoud Boot (University of Amsterdam), Elena Carletti (Bocconi University), Rainer Haselmann (Goethe University Frankfurt and SAFE), Hans-Helmut Kotz (Harvard Center for European Studies and SAFE), Jan Pieter Krahnen (SAFE and Goethe University Frankfurt), Loriana Pelizzon (SAFE and Goethe University Frankfurt), Stephen Schaefer (London Business School) and Marti Subrahmanyam (NYU Stern Business School).

The economists' proposal has been published by the policy portal VoxEU of the Centre for Economic Policy Research (CEPR), among others. VoxEU disseminates and promotes science-based policy analysis and commentary by leading economists.

On April 8, Arnoud Boot, Elena Carletti, Jan Pieter Krahnen, Loriana Pelizzon and Marti Subramanyam also presented the conclusions in a SAFE-CEPR Policy Webinar. The experts focused on the question of how support for small and medium-sized enterprises can be organized. Watch the video

SAFE Policy Letter No. 78: Corona and financial stability

SAFE Policy Letter No. 79: Corona and financial stability 2.0: Act jointly now, but also think about tomorrow

SAFE Policy Letter No. 81: Corona and financial stability 3.0: Try equity - risk sharing for companies, large and small

SAFE Policy Letter No. 84: Corona and financial stability 4.0: Implementing a European Pandemic Equity Fund

VoxEU: Coronavirus and financial stability 3.0: Try equity – risk sharing for companies, large and small