Economics
IMF’s Adrian sketches macro-financial model of term premium
Tobias Adrian outlines a new way of modelling financial cycles within a New Keynesian framework, which produces a good fit with empirical observations on the term structure
Oil prices feed through to core inflation – Fed paper
Research finds changes in the oil price have a small but statistically significant impact on core inflation
National Bank of Denmark sees "major challenges" for Greenland’s economy
Greenland is experiencing an economic boom, but needs to diversify its economy; central bank warns political independence may be a mistake
Wage growth may be stronger than headline figures suggest
San Francisco Fed researchers point to evidence that headline figures may overstate wage weakness; UK figures provide a positive surprise
Book notes: The Limits of the Market, by Paul de Grauwe
De Grauwe has produced a concise analysis into how markets and governments react with one another; but his lack of familiarity with the history of economic thought is surprising
Lithuanian paper examines interplay between European housing and credit
Panel-like econometrics may give misleading results, authors warn
Goodhart and Pradhan: demographics will reverse ‘multi-decade’ trends
Ageing population is likely to put upward pressure on real interest rates and inflation, and push down inequality, economists say
Banks need to tailor data strategies to clients, paper says
Dutch customers are open to sharing their payments data to enhance security, but do not want banks to sell it on, research finds
Credit spreads’ limited use as short-term predictors – paper
Researcher examines the accuracy of three sets of credit spreads
Kansas Fed paper looks at impact of recessions on US workers
Participation rate of “prime-age” workers most likely to vary with business cycle, paper says
Spanish paper looks at business cycle’s effects on industry
Industries are not moving uniformly to cohesion with the business cycle, says paper
Paper’s forecasting technique using Markov-switching models
Results outperform Fed’s survey of professional forecasters, says Bank of Spain paper
San Francisco Fed economist explores methods to forecast interest rates
Michael Bauer aims to forecast interest rates based on the current level and long-run trend, and a narrative linking both
UK economy vulnerable to consumption-led recession
Fragile consumer spending could take a toll on growth, former BoE officials warn, leaving the central bank with a tough job ahead
Fed’s Brainard says US is ‘falling short’ in diversifying economics
Federal Reserve Board governor highlights the benefits of diversifying the economics profession, urging students to consider a career before “shutting the door”
Tax cuts should focus on income from capital, French paper argues
Cutting taxation on labour is less effective in boosting growth, researchers say
US taxes low by global standards, say Chicago Fed economists
Overall burden of taxes is low by OECD standards, and taxes on capital income are notably lower than in Germany, economists say
Piecing together a financial theory of stagnation
Ideas presented at recent BIS annual meetings reveal an emerging framework that explains how the financial system may be dragging down the real economy; Hélène Rey was the latest to contribute
Eurozone’s demographics will continue to push interest rates down – paper
Structural policies will take time to reverse impact of adverse demographics, researchers say
Paper proposes method to estimate network of exposures
Researcher draws on aggregate exposures and market data to build a more complete picture of the network of bank exposures
Flexible working may shift Nairu, ECB’s Mersch warns
Technology may increase insecurity and weaken collective bargaining, says senior ECB figure
Singapore’s inflation sees sudden drop in June
Sharp fall in inflation was due to the falling prices of housing maintenance and repairs, triggered by the timing of government rebates
IMF gloom on US and UK balanced by brighter spots elsewhere
IMF raises projections for China, Japan and eurozone as the UK and US falter; maintains global growth forecasts at 3.5% in 2017
BoE economists issue ‘call to arms’ for macro-prudential research
Researchers outline a simple framework to help understand the macro-prudential “balancing act”, but say there is a long way to go in developing a definitive model