Economic Policy Regime in the Post-COVID-19 Era
Over the past century, there have been considerable swings in the thinking about the efficacy and roles of economic policy. Since the 1980s, we have seen the rise of neo-liberalism, which emphasizes the efficiency of the market mechanism and thereby calls for deregulation, tax reduction, and economic globalization. In this policy regime, macroeconomic stabilization was mostly taken care of by monetary policy, and income inequality was expected to be resolved by the trickle-down mechanism.
However, in the past 20 years, disillusion has set in regarding neo-liberalism. Despite the progress in deregulation, tax reduction, and globalization, we have seen no significant acceleration in economic growth among the advanced economies. Given the 2007–08 global financial crisis, the limits of the market mechanism and monetary policy have become evident. In addition, the COVID-19 crisis has made clear the foremost importance of the role of government during such crises.
Given these experiences, the coming years will see a search for new economic policies. This program will study the direction of the economic policy regime in the post-COVID-19 era.