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"Certain growth-promoting policies can have negative side-effects by increasing the vulnerability of economies to financial crises. Typical examples are greater openness to financial flows or more liberalised financial markets. This paper investigates whether the growth benefits of policy reforms in these growth-enhancing areas, and others such as trade openness, exceed the possible costs of occasional, albeit potentially severe, crises for a sample of 100 developed and emerging economies from 1970 to 2010. The results suggest that the pro-growth effects of greater capital account openness outweigh the negative effects of a higher propensity to twin crises. Greater domestic financial liberalisation is associated with faster growth, but also with a higher propensity to systemic banking and twin crises. A free floating exchange rate and greater openness to trade, by reducing the likelihood of currency crises, are associated with higher growth. While pro-competitive product market regulations and lower corporate taxes are associated with higher growth, they do not seem to influence financial fragility via higher probability of crises."

"This paper explores the relationship between policy settings and extreme positive and negative growth events, what we call GDP tail risks, using quantile regression methods. Conditioning on several country characteristics such as the size, stage of development and openness to trade as well as macroeconomic policies, the following findings for a panel of mostly OECD countries emerge: First, countries with stronger banking supervision and capital market development, better quality of governance, higher foreign reserves and several labour market characteristics such as higher unemployment benefits and greater spending in active labour market policies tend to experience less severe negative growth shocks (negative tail risk). Second, greater use of macro-prudential tools is generally associated with less extreme positive growth shocks (positive tail risk) and lower average growth. Third, larger automatic stabilisers are associated with both less severe negative and positive growth shocks but also lower average growth."

"This paper reviews the main issues related to the short-term impact of structural reforms in different macroeconomic contexts and takes stock of existing theoretical and empirical studies. Taking reforms introduced in "normal" times as a benchmark, it reviews the available evidence on the impact of reforms that are implemented in "bad" times - i.e. in the presence of a sizeable negative output gap and persistently weak demand - as well as under different assumptions regarding the availability or effectiveness of macroeconomic policies in supporting the reforms. In doing so the paper focuses on the key channels through which different reforms influence short-term activity via the main components of demand and discusses how these channels operate under different macro conditions. Overall, the evidence suggests that in a context of weak demand, structural reform strategies will have significantly better chances of being successful if they put more weight on measures that in addition to stimulate employment or productivity in the medium term can best support demand in the short term."

"It is important to understand the nature and drivers of informality, as its social and economic consequences are wide-ranging. This paper critically reviews the current state of cross-country research on informality and discusses how existing data sources can be more effectively employed and extended to shed light on the link between public policies and informality. A number of interesting findings emerge. The informal economy is multi-faceted and a wide range of definitions and measures are required to capture its diverse activities. However, most existing – and widely used – cross-country estimates of informality suffer from large measurement problems, which reduce the reliability of existing empirical evidence on the extent and drivers of informality. Accordingly, future research on informality should be closely linked to obtaining better data, particularly at the household and firm levels."

"The Spanish economy is growing strongly, but there is a risk that many people are being left behind. Unemployment, especially among young people and the low-skilled, remains very high. About half of all the unemployed have been unemployed for over a year and one third for more than two years. A quarter of all those who are employed are on temporary jobs. Since the global economic crisis, poverty and inequality have increased. An immediate priority is to ensure adequate income support for those most in need. Getting more people into better jobs is crucial to raise living standards and to reduce poverty. In terms of structural policies, this requires continuing to improve activation policies, such as training and job placement, re-skilling and up-skilling the unemployed, preventing youth from leaving the education system under-qualified and better on-the-job-training. More can be done to foster the creation of better quality jobs by reducing barriers to hiring and addressing labour market duality."

"Considering the deep and long-lasting impact of severe recessions, such as the 2008-09 financial crisis, it is important that measures be taken to minimise the risk of such event. But in doing so the benefits need to be balanced against the potential costs in terms of lower average growth that some of the actions to lower vulnerabilities to bad events could entail. Insofar as the risk-mitigating measures can involve a trade-off between growth and crisis risk, the most cost-effective actions need to be identified, spanning both macro and structural policies. The work summarised in this paper has explored this issue using two complementary empirical approaches, both providing insights on the impact of various policy settings on average GDP growth on the one hand, and either crisis risks or GDP growth at the (negative) tail end, on the other. The results indicate that pro-growth product and labour market policies generally have little impact on the exposure to crisis. More significant tradeoffs between efficiency and crisis risk arise in the case of financial market policies."

"Europe's economy is finally growing robustly. These positive developments provide an opportunity to renew efforts to meet the long-term challenges facing the European Union (EU). The EU's record on reducing regional income disparities is mixed and this explains some of citizens' discontent with the European project. Reforming cohesion policy by focusing spending more on items with long-term growth benefits and clear spillovers across borders, including human capital and infrastructure investment could further support income convergence. Higher co-funding rates and less burdensome administration of the cohesion and structural funds could encourage greater spending effectiveness. Sustained improvements in living standards are held back by weak productivity and investment in many countries. Reviving the single market project, by removing remaining barriers in services, energy, digital and transport can help to spur long-term growth. Deepening the single market and faster adoption of digital technologies will create new jobs but put at risk others, perhaps in lagging regions. The EU can help lagging regions catch up by reforming cohesion policy and facilitating firm creation through the removal of barriers across the single market. It can also support better those who lose out from globalisation and are displaced by technological change by making access to the European Globalisation Adjustment Fund easier and broadening its scope not only to help workers displaced by globalisation or an economic crisis, but also due to other reasons such as automation. This Working Paper relates to the 2018 OECD Economic Survey of the European Union. (http://www.oecd.org/eco/surveys/economic-survey-european-union-and-euro-area.htm)"

This paper was prepared in support of Japan's G20 Presidency. It takes stock of ongoing and projected population ageing across G20 economies and its far-reaching implications for economic growth, productivity, inequality within and between generations and the sustainability of public finances. Rising old-age dependency ratios will put the financing of adequate pensions, health and long-term care under high pressure. The paper provides recommendations on policy responses to address ageing-related challenges and highlights good practices. A comprehensive approach is needed, tailored to each country's institutional and policy settings and social preferences, and may span many areas of public policy: improving the design of public pensions, incentivising private savings, enhancing the efficiency of health care provision, expanding the coverage of social security systems, promoting employability and skills of older workers, and striving for a better labour market inclusion of women, youth and migrants."

"International cooperation amplifies individual countries' efforts; in the fight against the COVID-19 pandemic, international cooperation is not only useful, but indispensable. This column discusses eight priorities to strengthen international cooperation against COVID-19, both in the short term for crisis response, and to facilitate an inclusive and sustainable recovery. In the short run, cooperation between governments is needed to curb the pandemic and expedite exit from the crisis. In the medium and long run, internationally coordinated policies can facilitate recovery and the rebuilding of socioeconomic systems in inclusive and sustainable ways and help prepare for future risks and pandemics."