Economics
Growth in the digital economy has scrambled statistics – IMF paper
Countries may have been understating GDP growth, while overstating inflation, IMF analysis reveals, as digital products skew prices
ECB paper proposes eurozone stabilisation policy based on trade changes
Scheme would avoid moral hazard or permanent transfers from one country, authors argue
Bundesbank paper looks at cross-border cycles in six European economies
Equity prices and interest rates more strongly synchronised than real economic activity – researchers
High-frequency data helps capture ‘psychological subtlety’ – BoJ paper
Study of “tick-by-tick” data finds markets have become more sensitive to the central bank’s policy announcements
Israel’s Flug calls for higher-quality labour market
Bank of Israel governor says country is close to full employment but must do more to improve labour market conditions
IMF warns Tunisia over inflation, deficit and currency
Central bank may have to hike rates further, IMF executive board says
Yield curve can help improve forecasts – RBNZ economists
Yield curve information tends to improve forecasts of economic activity, researchers find
IMF unveils new data strategy
Fund’s first ever “overarching strategy” on data envisages new approach to gathering, processing and sharing statistics
BIS economists find frictions in banks’ dollar funding
Authors investigate wide divergence in the business models of European and Japanese banks
Latin American markets were hit by 2010 US ‘flash crash’, DNB paper finds
Fall was driven by equities markets’ interdependence, not contagion, researcher argues
Stock imbalances can stabilise or destabilise – BIS paper
Asymmetry implies burden of adjustment tends to fall on deficit countries
Denmark is entering a boom – central bank
The Nordic country is benefiting from the growth in export markets, including the US and eurozone
BIS’s da Silva defends DSGE modelling efforts
The models have not performed as badly as critics claim and new research efforts are creating fresh possibilities, says BIS’s deputy general manager
RBI paper finds complexity in exchange rate pass-through
Authors argue the standard view of exchange rates having a “linear and symmetric” impact on prices is flawed
Financial frictions key to DSGE performance – NY Fed paper
Post-crisis period was a harsh testing ground for structural models, but the New York Fed’s DSGE model was at least equal to private forecasts, researchers say
ECB’s open market operations often raise banks’ liquidity – paper
Asset “haircuts” imposed by ECB often smaller than those in repo markets – researchers
BoE not to blame for gold standard-era crises in US – paper
Bank of England’s rate decisions between 1884 and 1913 were not responsible for “causing or aggravating” crises in the US, author finds
Neural network learns ‘universal model’ for stock-price moves
Relationships between order flow and price “are stable through time, and across stocks and sectors”
Intellectual property investment fuelling growth in Australia – Lowe
RBA governor says lack of growth in “tangible assets” is turning investment towards the information technology market
Yield curve inversion still tends to signal trouble ahead – Fed economists
The term spread has a “strikingly accurate record” for forecasting recessions, and this time looks to be no different, say researchers
Dudley goes against Trump’s protectionist line
New York Fed president criticises protectionism as Donald Trump steps up rhetoric; questions value of excessive reserves accumulation
NY Fed paper studies when government should issue safe assets
Model implies only under certain situations should the government issue new debt; changing inflation target might be superior
Tighter policy policy may increase financial instability, researcher says
Higher rates may pressure banks’ balance sheets and increase assets held by money market funds, says paper published by San Francisco Fed
Measuring Venezuela’s hyperinflation
Steve Hanke discusses how economists can make use of high-frequency exchange rate data to track rapid price movements in Venezuela