Monetary Policy
Fed does not respond to oil price shocks: CEPR paper
CEPR paper argues against the standard view that Fed’s policy responses to oil-price-led inflation caused economic instability
Bubbles a bigger threat than inflation: HKMA’s Chan
Hong Kong Monetary Authority’s Norman Chan sees irrational exuberance as greater risk than spiralling prices
Central banks should have control over credit
Two economists argue in support of a role for credit in central banks’ mandate, and analyse the claim that financial crises are “credit booms gone wrong”
Imbalances must be addressed: Trichet
ECB president Trichet points to imbalances in emerging Asian countries and stresses importance of Europe-wide and international cooperation on macroprudential supervision
Using inflation to erode the US public debt
Paper examines relationship between size of debt and the temptation to inflate
Rate decisions this week
Korea, New Zealand hold but indicate tightening soon to come. Bank of England and Bank of Canada maintain policy stance, along with Peru and Brazil as Denmark and Iceland cut
America can learn from us: Uganda’s Tumusiime-Mutebile
Bank of Uganda’s governor says risk-based supervision saved the country’s banks; reinforces the importance of open-market principles for the economy
Iceland cuts on further signs of stability
Central Bank of Iceland continues with “gradual” easing as currency stabilises
SNB steps towards exit
Swiss National Bank announces end to credit easing
Explaining wage stickiness
Bank of Estonia research suggests workforce composition, factors in individual countries and a positive relationship with competition all explain the downward rigidity of earnings
CentralBanking.com panel: it’s too soon to exit
Charles Goodhart, Paul Mortimer-Lee, Lucrezia Reichlin and Gabriel Stein concur that dangers are greater from exiting too early than too late but warn that asset prices risk becoming over inflated
China to maintain “moderately loose” policy
People’s Bank of China indicates rates will be kept low for some time to support growth and stability; statement echoes the pledges of central economic conference
Israel minutes show division between advisers
Minutes of the Bank of Israel’s November meeting reveal one of the four advisers to the governor said rates should be left unchanged, while three voted for a 25bp hike
Ex-RBNZ head hits back at inflation-targeting critics
First governor to preside over the introduction of inflation targeting defends framework against recent criticisms
Former Fed economist calls for more stimulus
Ex-Federal Reserve official says focus must be on providing up to $6 trillion more monetary stimulus rather than exit strategies
Unconventional monetary policy reviewed
Claudio Borio and Piti Disyatat set out a framework of definitions to help categorise and clarify the functions of various monetary policy tools, and assess central banks’ actions since the crisis
Reflections on liquidity crises: Borio
The BIS’s Claudio Borio discusses ten propositions on liquidity crises, including the importance of improving buffers and the need for principles on central bank liquidity provision
Influences on crisis fighting in emerging markets
International Monetary Fund examines why some emerging-market economies took special-liquidity-easing measures during the crisis
RBI’s Gokarn drops more hints of tightening
Reserve Bank of India deputy governor Subir Gokarn among a slew of officials to comment on demands of rising inflation on monetary policy; calls for a staggered approach to exit
Inflation targeting remains relevant
Inflation targeting can and should survive recent criticisms, argues Don Brash, a former governor of the Reserve Bank of New Zealand – the first central bank to introduce the framework
Japan’s recovery to be moderate: Shirakawa
Bank of Japan’s Masaaki Shirakawa cautious on economic recovery
Eurozone lending tightened in October
European Central Bank reports decrease in the growth of credit to the private sector
Exit from extraordinary measures “straightforward”: NY Fed’s Sack
Brian Sack, the New York Fed's markets chief, says creating emergency facilities was harder than withdrawing them will be
Monetary policy in preventing boom-bust housing cycles
Bank of Canada paper argues that central banks should react less to inflation and more to output to avoid making boom-bust cycles worse