The COVID-19 pandemic is a serious crisis. To understand its effects, and to guide policy responses, we need evidence. However, since the crisis is recent, we do not yet have enough data to understand its long-term effects; since some policy responses have not yet been tried, or have only recently been implemented, we are unable to assess their success. Moreover, particularly given the seriousness of the pandemic, we need to ensure that evidence is of the highest quality, but the peer review process in finance journals takes several years.
The Review of Finance has prepared a virtual special issue highlighting published papers on past crises and economic downturns. While no two crises are the same, and the findings on prior downturns will not automatically apply to COVID-19, these papers will hopefully shed useful light on the current crisis. First, they are peer-reviewed; second, sufficient time elapsed after the downturns or policy responses to allow analyses of their long-term effects. A short summary of each paper and its potential relevance to the current crisis follows below.
All articles are freely available to read and download.
Effect of Crises on Job Losses
- Labor Representation in Governance as an Insurance Mechanism
E Han Kim, Ernst Maug, Christoph Schneider
Review of Finance, Volume 22, Issue 4, July 2018, Pages 1251–1289, https://doi.org/10.1093/rof/rfy012
- ECB Policies Involving Government Bond Purchases
Arvind Krishnamurthy, Stefan Nagel, Annette Vissing-JorgensenReview of Finance, Volume 22, Issue 1, February 2018, Pages 1–44, https://doi.org/10.1093/rof/rfx053
- Monetary Policy, Bank Bailouts and the Sovereign-Bank Risk Nexus in the Euro Area
Marcel Fratzscher, Malte Rieth
Review of Finance, Volume 23, Issue 4, July 2019, Pages 745–775, https://doi.org/10.1093/rof/rfy024
Mitigating Financial Shocks to Firms
- Market Size Structure and Small Business Lending: Are Crisis Times Different from Normal Times?
Allen N. Berger, Geraldo Cerqueiro, María Fabiana Penas
Review of Finance, Volume 19, Issue 5, August 2015, Pages 1965–1995, https://doi.org/10.1093/rof/rfu042
- “Forgive but Not Forget”: The Behavior of Relationship Banks When Firms Are in Distress
Review of Finance, Volume 23, Issue 6, October 2019, Pages 1079–1114, https://doi.org/10.1093/rof/rfy031
- Do Credit Default Swaps Mitigate the Impact of Credit Rating Downgrades?
Sudheer Chava, Rohan Ganduri, Chayawat Ornthanalai
Review of Finance, Volume 23, Issue 3, May 2019, Pages 471–511, https://doi.org/10.1093/rof/rfy033
- Internal Capital Markets in Times of Crisis: The Benefit of Group Affiliation
Raffaele Santioni, Fabio Schiantarelli, Philip E Strahan
Review of Finance, Volume 24, Issue 4, July 2020, Pages 773–811, https://doi.org/10.1093/rof/rfz020
How Investors Price Default Risk