Economics
Monetary policy could face ‘tougher tests’ ahead, BIS warns
Soft landing “in sight”, but pricing imbalances, fragile fiscal policy and financial vulnerabilities loom
Canadian rate hikes may have lasting effects – research
Bank of Canada researchers find disposable income could decrease by up to 5% by 2027
US inflation’s last mile ‘could take several years’ – Cleveland Fed
Favourable shocks are necessary to reach 2% quickly, researcher argues
Transitioning to renewables could reduce shock impact – research
Authors say Brazilian economy may serve as a model in the clean energy transition
Monetary policy-makers should track bubbles – Dallas Fed paper
Economists warn of possible ‘explosive bubbles’ and evaporating wealth
Italian service sector needs liberalising, paper finds
Bank of Italy research says making market entry easier boosts productivity for all firms
Simpler models can capture dynamics of Hank framework – NBER paper
Heterogeneity can be “irrelevant” to determining output in some situations, authors find
UK inflation touches BoE’s target
Alignment with goal expected to be short lived but opens door to rate cuts later in year
Book notes: The wealth of a nation, by Geoffrey Hodgson
This book provides a deep dive into the economic and institutional transformations that supported the rise of English capitalism
Start small to secure resources for AI, central bankers say
Data-driven results could demonstrate GenAI’s usefulness, Summer Meetings hear
Central bankers warn of US election risks
Danger of tariffs and supply chain disruptions, Central Banking Summer Meetings hear
Housing price disparities complicate US monetary policy – research
Time-varying inertia in prices makes housing bubbles more unpredictable, Dallas Fed paper says
Economics is becoming exclusive, RBA official warns
Drop in diversity among Australian economists will hurt discipline, Jacqui Dwyer says
Atlanta Fed cuts second-quarter US GDP estimate
Bostic says “orderly slowdown” could be positive news
Fed research investigates supply chain resilience
Stiglitz and co-authors look at firms’ investment in production capacity
Global natural rates could be rising, SNB governor says
Jordan says Swiss central bank’s approach allows it to deal with uncertainty over r*
Acemoglu questions productivity benefits of AI
MIT economist finds weak productivity gains from AI and says benefits may be undermined by costs
Twenty years on, Visegrád states are converging to rest of the EU
Czech Republic, Hungary, Poland and Slovakia have undergone economic transformation, CNB finds
Bank of Canada conducts large-scale survey of indigenous-owned firms
Indigenous firms have higher inflation expectations and use alternative funding sources
ECB paper recommends central fiscal instrument
Governments’ ability to delay fiscal consolidation should be limited, researchers argue
Can US policy choices explain economic divergence?
NIESR’s Ahmet Kaya finds US fiscal stimulus may have masked standard economic relationships, but economic gravity may soon reassert itself
What is forecasting for? Bernanke and the future of BoE projections
The Bernanke review pushes central banks to rethink the role of forecasts in policy-making, but it also shies away from solving a key paradox in the process
Global supply chains undergoing “great reallocation”, expert says
Mexico is biggest winner from US trade shift, economist tells Atlanta Fed conference