Odd Lots Hyun Song Shin On What Central Banks Have Learned From The Crisis
Jul 2, 2020
Hyun Song Shin, an economic advisor and head of research at the Bank for International Settlements, dives into the lessons central banks have learned from the pandemic crisis. He discusses the unique challenges of this recession compared to past downturns. Key insights include the evolution of policy tools and the need for collaboration between central banks and fiscal authorities. Shin also highlights the persistent dominance of the dollar in global trade and the emerging inequalities exacerbated by economic policies.
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2020: A Unique Crisis
- The 2020 economic crisis is unique, combining a health crisis, economic sudden stop, and financial crisis.
- This makes it unlike previous crises, requiring new policy tools.
2020 vs. 2008
- While 2008's tools were helpful, the 2020 crisis originated outside the financial system, impacting individuals and businesses directly.
- This required new policy innovations to reach those most affected.
Liquidity vs. Solvency
- Central banks excel at addressing liquidity issues but struggle with solvency problems, which are more prominent now.
- The challenge lies in effectively addressing the long-term viability of businesses.