The role of the central bank in maintaining the stability of a nation’s financial system is paramount at all times, but especially during a crisis of the magnitude of COVID-19. Around the world, policymakers have intentionally shut down their economies for the greater good of public health. What specific emergency measures have the world’s top central banks taken to confront this truly unique peril to both physical and financial well-being?
Anemic economic growth in advanced economies has led central banks to prescribe loose monetary policy that has not produced the cure. The problem may lie more on the supply than demand side; digital innovation in industrial operations if properly implemented could lead to the transformative revolution that will boost productivity and revive economic performance.
Forecasting economic risk is an attempt to quantify the unknowable in a complex, ever-changing system. Although they often fall short of future realities, macroeconomic forecasting models that include thoughtful and comprehensive analyses of risk factors will provide launching points for serious and useful economic-policy discussion and planning.