Macroeconomics
LatAm should pursue regional financial integration – IMF paper
Timing is “ripe” for region to pursue financial integration as means of counterbalancing effects of departing global banks, authors say
BIS paper finds Fed’s QE had little discernible impact on real economy
Results are still preliminary, authors say, but “cast some doubt” on the effectiveness of US quantitative easing
BIS paper presents evidence on Uruguayan price setting
Authors develop survey-based measure of firms’ price-setting behaviour, which may prove useful for research on other emerging markets
Eichengreen sees danger in US fiscal stimulus
Veteran economist warns infrastructure spending in the US may prove damaging to both the domestic and global economy, without necessarily fixing secular stagnation
Azerbaijan raids oil fund as central bank reserves dwindle
President allocates chunk of oil fund to top up central bank reserves, as pressure on the manat continues
Global value chains increasingly driving global inflation – BIS paper
Growth of global value chains limits the importance of domestic factors in creating inflation, complicating the jobs of central banks
Nigerian central bank details funding for farmers
Programme is latest to aim at boosting production of import substitutes
Terms-of-trade shocks affect house price fluctuations – paper
Bank of Canada research shows terms of trade shocks explain large percentage of variance in house price growth; most of the variation associated with changes in real import prices, authors say
Haldane hopeful for ‘rebirth’ of economics
BoE chief economist believes crisis for the profession could lead to a break with past thinking; offers solutions to productivity problems
Palestine Monetary Authority forecasts slowdown amid ‘political impasse’
Authority sees likelihood of “slackening trend” of growth in coming years as Gaza Strip “siege” continues and restrictions affect the West Bank
BIS’s Caruana: fiscal space is ‘slippery’
Fiscal authorities should not overestimate the available room for manoeuvre, as less obvious factors may pose constraints, BIS chief says
IMF paper shows US monetary conditions impact EM leverage
Impact is more pronounced for firms that are dependent on external financing, authors find; sample shows financial conditions have the ability to influence borrowing constraints
Greek negotiations turn acrimonious amid debt relief freeze
ESM freezes debt relief measures for Greece, accusing government of breaking spending promises; European Commission’s Moscovici hits back at IMF criticism
Non-linear shocks create asymmetric policy impacts – paper
Bank of England working paper shows a shock to mortgage spreads has more of an impact on the real economy during periods of recession, with implications for policy
Netherlands paper exposes differing capital flows across EMU
Paper examines the mechanism behind divergence of north and south eurozone members, as capital flows caused external imbalances to move in opposite directions
IMF paper links Chinese growth to ‘drastic increase’ in inequality
Rapid growth in recent decades linked to rising economic inequality, with consumption and income inequality co-moving closely
IMF officials say they want less austerity for Greece, not more
Fund and European creditors still disagree on design of Greek programme, as IMF says fiscal targets must be realistic
Icelandic paper finds evidence of rising natural rate
Authors attempt the notoriously difficult process of estimating the natural rate, using various models; rate appears to be on the rise
BoE paper drops rational expectations to solve unemployment puzzles
Replacing rational expectations with adaptive learning helps fit the standard theory of unemployment to the data, economists find
IMF to tackle effects of globalisation in 2017
Fund says it will focus on bringing the benefits of globalisation and technology to a wider section of society, amid a populist backlash against openness
BoE’s Vlieghe dismisses neo-Fisherian idea that low rates cause low inflation
MPC member says “small minority” of academics who suggest lower rates may cause low inflation do not present particularly compelling arguments
Stiglitz urges central banks to focus on credit, not interest rates
Emphasis on interest rates ignores more important question of whether credit is getting where it is needed, Nobel economist argues
RBA paper asks why companies fail
Researchers find specific features of Australian companies make them more likely to fail
Israel’s red tape is bad for business – Flug
The Bank of Israel governor says cutting back on bureaucratic regulations could help the economy grow faster with little budgetary impact