Economics
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
BoE paper: ‘imperfect common knowledge’ implies Taylor principle need not hold
It is not strictly necessary for a central bank to respond to temporary deviations of the economy from trend, paper finds; result challenges findings such as ‘Neo Fisherism’
Finnish paper presents two explanations for eurozone weakness
Paper looks at fall in natural interest rate and output rate shocks
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
Successful bank nationalisations need trust in government, paper argues
DNB paper looks at effects of government intervention on bank customers’ behaviour
BoE research offers insights from new regulatory database
The new database, comprising banks’ regulatory submissions, allows authors to shed new light on the evolution of the UK banking sector in recent decades
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
Encouraging creation of ‘quasi-safe assets’ may be destabilising, paper argues
Investors have distinct “safety demand”, researchers argue
Spanish paper proposes new measures for economic recoveries
Researchers apply new tests to data on US post-war expansions
RBNZ paper sets out new house price indexes
Improved dataset allows design of three new indexes, all of which produce “credible-looking” outcomes
Danish GDP revision helps solve productivity puzzle – bank
Figures better capture details of the current account, leading to substantial revisions in GDP and productivity growth, the Danish central bank 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
Central banks’ liquidity injections may amplify bank runs, paper argues
ESRB paper looks at 2008 US crisis using simple model of bank runs
IMF paper offers new ways of measuring capital flow volatility
Authors say more granular dataset and three different methods of calculating capital flow volatility allow them to gain new insights
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
Book notes: The Nobel Factor, by Avner Offer and Gabriel Söderberg
The authors offer some illuminating points on the politics behind the Nobel Prize in Economic Sciences, but fail to sufficiently challenge Sweden's social democracy, writes Graham Bannock
Scrap micro-foundations to repair macroeconomics – Steve Keen
Professor says economy should be viewed as a dynamic system with credit playing a crucial role, arguing we should ditch models such as DSGE
ECB paper models effects of bank guarantees
Guarantees improve welfare by increasing liquidity transformation, researchers find
RBA paper assesses FOMC’s forecasting performance
RBA and Fed economists collaborate on study of forecasting errors by the Federal Open Market Committee
Bank of Spain paper calculates implicit public debt thresholds
Researchers build on earlier work and apply models to Spanish data
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