Macroeconomics
“Make-up” strategies may boost monetary policy, says paper
Price-level and average inflation targeting regimes stabilise import-related inflation, researchers find
Cook suggests US may need to change inflation models
Fed governor believes inflation on path to 2% but tight labour market remains upside risk
IMF’s Gopinath rewrites classic open-economy model
Mundell-Fleming model’s assumptions make it less useful for modern policy-making, economist says
Economics Benchmarks 2022 – executive summary
Key findings of the 2022 report, including model choices, governance structures and data use
Economics Benchmarks 2022 report – evolving models
Central banks continued to develop their modelling frameworks in 2022, as some longer-term trends in governance structures and research agendas emerged from the data
China needs dollar reserves to bolster renminbi – Eichengreen
Authorities must reassure global markets to make renminbi reserve currency, paper argues
ECB paper examines effects of real rates on banks’ fragility
Level of real interest rates determines whether price or scale effects predominates, researchers find
Inflation, geopolitics and the renminbi
At a Bank of China (Hong Kong)-sponsored forum, policy‑makers discussed geopolitical developments and China’s macroeconomic outlook as global inflation rises
Book notes: A monetary and fiscal history of the United States, 1961–2021, by Alan Blinder
The book’s breakthrough is its infusion of the history of fiscal policy into a theoretical framework traditionally focused on monetary instruments. It is a splendid and thrilling read
Housing plays growing role in transmitting ECB policy, paper finds
Labour earnings still most important means of transmission, researchers say
Chile’s Costa on tackling inflation, forex interventions and nowcasting
The Central Bank of Chile governor speaks about stubbornly high prices, Fed policy spillovers, reserve buffers, retail CBDC and the need to address unconscious bias
ECB paper presents new corporate default prediction method
Authors say their “distance to insolvency” measure outperforms other forecasting methods
Carstens wins major Spanish economics prize
King of Spain award praises BIS president’s work in Mexico and globally
Argentine central bank debt poses major risks, analyst says
Moody’s analyst says central bank faces macroeconomic crisis as short-term debt rises
Climate change may have serious effects on natural rate – ECB paper
Monetary policy may need more flexibility to deal with climate and green transition, researchers say
ERM’s 1992 crisis offers lessons for today, academics say
Barry Eichengreen, Maurice Obstfeld and Richard Portes discussed “accident waiting to happen”
Nominal interest rates strongly affect savings – ECB paper
Simple models based on real rates do not accord with eurozone data, researchers find
Expectations are key to carbon tax’s impact, says ECB paper
Inflation may rise if consumers doubt government’s commitment to raise green taxes, research finds
US needs tighter policy, former senior Fed adviser says
Higher rates will cause little damage to supply chains, David Wilcox argues
IMF paper offers ‘fear-based theory’ of economy
Central banks risk distorting the economy if they don’t move interest rates to offset “fear cycle”
Joseph Stiglitz on the challenge of fixing macroeconomics
The Nobel Prize-winning economist discusses the flaws in mainstream models and how to repair them, whether central banks went wrong in 2021, and what to do – or not to do – about inflation
Eurozone repo markets are slowing policy transmission, ECB paper says
Dealer banks use market power to get better prices from other institutions
ECB’s Lane and Schnabel strike different notes on eurozone inflation
Schnabel says “right tail” shift could herald de-anchoring, but Lane says other outcomes are possible
Joseph Stiglitz calls for rethink of macroeconomics
DGSE models have “nothing to say” about economic effects of Covid-19 measures, Nobel winner says