Macroeconomics
Spanish paper models effects of European ‘fiscal delegation’
Supranational fiscal authority would improve welfare, authors argue
Financial constraints fuel price mark-ups, Italian paper finds
Researchers use data on Italian economy in 2010 to 2013
Bank and capital market financing not created equal – BIS paper
Substituting bank loans for non-bank finance after a shock appears to have a negative impact on the economy, authors find
Commodity prices impact the probability of project completion in Peru – paper
BIS paper examines how a drop in oil prices affects the timing and completion of investment projects; results show mining sector in Peru is particularly sensitive
Schembri: mix of factors holding back Canadian investment
The outlook is improving, the deputy governor says; openness to trade and immigration are likely to boost growth
Positive shock could still trip up advanced economies – Blanchard
Former IMF chief economist warns high debt levels could interact with positive shocks to cause problems; backs Rogoff’s plan for a cashless society
Hysteresis can explain eurozone peculiarities – Eichengreen and Bayoumi
Eurozone has not responded to shocks in the way economic theory would normally imply, with the German economy tied surprisingly closely to those of ‘peripheral’ countries
Boost technology diffusion to solve productivity puzzle – Haldane
BoE’s chief economist says a “long tail” of low-productivity firms need support as they fall further behind a small frontier group
New factors driving EM corporate leverage – RBI paper
Changed macroeconomic backdrop has taken over from firm-specific factors in driving the build-up of corporate leverage in emerging markets, RBI economist finds
IMF authors examine conditions for structural reform success
Most labour and product market reforms strengthen medium-term output and fiscal sustainability, but they may be painful to implement in some parts of the cycle
US policy is “ultimate risk” for emerging markets – panellists
Expert panel says US fiscal, trade and monetary policy all have the potential to cause trouble for emerging markets in the coming months, though some risks seem over-stated
Caruana: financial globalisation is not over
BIS chief says “peak finance” has not arrived, despite signs of a slowdown in global banking activity; warns against inward-looking policy-making
BoE paper raises risk of ‘bubbly growth traps’
Asset bubbles can direct resources to low-productivity sectors, which could explain the long hangover from recent crises, author says
IMF stays tough on debt relief as it prepares to return to Greece
Maurice Obstfeld and other top officials stress the fund’s demands on debt sustainability; mission to return to Greece next week
FOMC sentiment effects tested with ‘computational linguistics’
Economists find sentiment conveyed by FOMC statements affects policy expectations, inflation, and industrial production
IMF paper examines bank lending in Saudi Arabia
Despite low oil prices, credit to the private sector “remained robust”, but an overreliance on banks financing the deficit needs to stop, author says
IMF authors build network model of trade fragility
Network theory helps authors unpick the effects of a supply shock on the “highly interconnected” global trade system
Asia needs new growth model – BoJ’s Kuroda
Region can no longer serve as “the workshop of the world” as the trade in goods slows down, says the Bank of Japan governor
Economics in central banking: Leo Krippner
His work on term structure modelling has helped central bank policy-makers to track the effects of unconventional policies and it raises many interesting possibilities for future research
Consumption shows asymmetric response to shocks – BoE paper
Households appear to respond more strongly to temporary negative shocks than positive ones, and effects are different for borrowers and savers
Fiscal rules fail to tackle EU policy biases – IMF research
Many biases relate to political economy factors, and should be tackled by future adjustments to the governance framework, IMF economists say
Brexit pain may be coming – panel
Former Bank of England officials warn of fading consumer spending and investment
BIS authors identify tipping point in household debt impact
Researchers trace the effects of household debt on the real economy, identifying thresholds beyond which the long-run impact on consumption and growth intensifies
CLS signs MoU with Chinese think-tank
The forex utility will work with the National Institution for Financial Development to support the renminbi’s internationalisation