Resilience Amid Structural Transformations: Are Macro Policy Frameworks Fit for Purpose?
Departmental Papers, August 27, 2026
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Bibliographic details
- Authors: Diala Al Masri, Ivailo Arsov, Yongquan Cao, Sonali Das, Julia Faltermeier, Anna Ilyina, Benjamin R Kett, Jesper L Linde, Mico Mrkaic, Jeta Menkulasi, Anh D. M. Nguyen, Julia Otten, Jerome Vandenbussche
- Published: August 27, 2026
- Series: Departmental Papers
- DOI: https://doi.org/10.5089/9798229042925.087
Summary and central conclusion
- The post-GFC era has marked a transition from the relative stability of the “Great Moderation” to a more volatile “Great Turbulence,” characterized by structural transformations, frequent shocks, heightened uncertainty, and constrained policy space.
- The paper examines whether existing macroeconomic policy frameworks remain fit for purpose in the face of four major global trends: demographic change, climate change, geoeconomic fragmentation, and artificial intelligence.
- Conclusion: credible, resilient, and well-coordinated policy frameworks will be essential to preserving domestic and external stability in an increasingly shock-prone world.
Four major global trends analyzed
- Demographic change
- Climate change
- Geoeconomic fragmentation
- Artificial intelligence
Key themes and policy-relevant findings
- Structural transformations and frequent shocks increase volatility and constrain policy space relative to the “Great Moderation” period.
- Existing macroeconomic policy frameworks face challenges in adapting to:
- heightened uncertainty,
- more frequent supply shocks,
- evolving inflation-output tradeoffs,
- changes in fiscal space needs, and
- implications of technological change for productivity and labor markets.
- Effective responses require frameworks that are:
- credible,
- resilient to shocks,
- well-coordinated across policy areas and borders.
Subject classifications and keywords (as presented)
- Subject: Artificial intelligence (economics), Economic growth, Economic theory, Fiscal policy, Fiscal space, Inflation, Prices, Structural transformation, Supply shocks, Technology
- Keywords: artificial intelligence, climate risks, demographic transition, economic policy, fiscal space, geoeconomic fragmentation, inflation outcome, inflation-output tradeoff, macroeconomic stability, monetary policy framework, monetary policy implication, monetary policy response, policy coordination, policy frameworks, structural change, supply shocks