Are we out of the woods? : the new economic policy mix

Abstract

This panel will discuss post-inflation crisis economic scenarios from a global and European perspective and reconsider the challenges that these poses to economic policy in Europe. Managing high levels of debt, financing the many “transitions” and the post-war reconstruction(s), and strengthening resilience to tail risk, will require a reconsideration of the mode in which different policy institutions interact, in guaranteeing sustainable growth, stability and inclusiveness. Many factors point to a return of secular stagnation, with low growth and low or negative interest rates. A high level of geopolitical and economic uncertainty in the post COVID-19 world, however, raises the possibility that low growth will coexist with high borrowing costs in many countries. How can Europe improve its capacity to prevent such scenario, while creating the macroeconomic and financial premise for an efficient redirection of its highquality resources towards innovative sectors and exploit the full potential of the single market?