Economics
IMF working paper sees regulation as key driver of decline in foreign lending
Research contends regulatory tightening is behind much of the ‘sluggishness’ in international banking since the crisis; exploits survey data compiled in preparation for GFSR
BoE searches for better data on macro-financial links
As part of efforts to crack the UK’s productivity puzzle, the BoE plans improved data-gathering, seeking insight into the impact of capital accumulation and access to finance
Perceived long-term eurozone deflation risk unaffected by oil – paper
Between 2010 and 2012, perceived short-term deflation risk was “significantly” affected by oil prices, while medium-term risk was only affected between 2013 and 2015, research suggests
Lower real interest rates may harm productivity growth, researchers say
Lower real interest rates may reduce productivity growth rates, researchers say; Italy and Spain have suffered low or negative TFP growth during existence of euro
Norges Bank researchers grapple with nonlinear exchange rate pass-through
Exchange rate pass-through in Norway is unusually high, which the authors suggest could be due to the size of recent currency movements – but pinning down the effect empirically proves difficult
Policy-makers could use fraud patterns as economic indicator – paper
Positive relationship exists between bank fraud and the macroeconomy, Chicago Fed risk specialist finds, suggesting fraud could offer an early warning sign of crisis
BoJ’s Funo calls for efforts to revive potential growth
Board member uses first speech to back continued expansionary policy, highlighting steps that could help raise Japan’s potential growth from current depressed levels
Philadelphia Fed president warns of ‘mismatch’ between education and business
Patrick Harker says there is a disparity between the education offered and practical skills needed by businesses in the US, which has likely contributed to slow recovery following crisis
Villeroy de Galhau calls for eurozone finance minister
Banque de France governor calls for single eurozone finance minister to co-ordinate fiscal and structural policy; warns of dangers of “overburdening monetary policy”
Sweden’s Riksbank has mixed forecasting performance, report finds
Riksbank “relatively good” at projecting growth and unemployment, but less so when it comes to the policy rate; this is “notable” and not “particularly satisfactory”, report notes
Government approves final stage of Thai development plan
Bank of Thailand will promote electronic payments in latest phase of financial sector master plan; all phases to be completed by 2020
Capital flow measures needed before offshore krona auction, says Guðmundsson
If the currency auction goes to plan, inward flows could strengthen and the Central Bank of Iceland needs the tools to resist them, its governor says
BoE’s Forbes outlines new thinking on current account imbalances
Breaking current account into trade and financial components allows more detailed analysis of when a large imbalance is dangerous and what shocks could cause trouble
Inflation expectations well-anchored, Richmond Fed president says
Lacker tells audience at Banque de France he believes expectations are anchored, despite drop in inflation compensation; Villeroy de Galhau notes drop in market-based measures in eurozone
Inflation and unemployment affect wage rigidity, Icelandic authors find
Research challenges New Keynesian assumption that timings of wage changes are exogenous, showing level of inflation and unemployment also matter
Research sheds light on RBNZ concerns over inflation expectations
Article authored by, among others, John McDermott argues the risk of inflation expectations losing their anchor has increased; concerns were a ‘primary motive’ for last week’s rate cut
Paper uses machine learning to nowcast GDP in Lebanon
Working paper published by IMF explores use of machine learning technique in assessing economic conditions in Lebanon, where analysis is a ‘distinct challenge’ on account of data lags
Charlie Bean calls for ‘culture changes’ at ONS in final statistics report
ONS should set up two centres to better measure economic activity, Bean says; using these centres will allow the ONS to fully ‘capture’ the digital economy
RBNZ tweaks forecasting models and cuts key rate
Reserve Bank of New Zealand cuts rates by 25bp to 2.25% in attempt to prevent inflation expectations from falling further; updates models in wake of optimistic forecasts
Paper finds evidence in favour of ‘exchange-rate-anchored inflation targeting’
A working paper published by the IMF finds ‘tight management’ of the exchange rate can help support inflation targeting in ‘less developed countries’
Brainard warns of segmentation of liquidity
Recent changes in liquidity practices may heighten financial markets’ vulnerability in stressed conditions, Brainard says; downward pressures on inflation remain, she adds
RBA’s Lowe says productivity still a problem
Australia has proven resilient through an uncomfortable rebalancing phase, but the economy is still plagued by disappointing productivity growth, deputy governor says
Regulation affects pass-through to current account, BoE paper finds
Discussion paper sets out theoretical and empirical backing for idea that low rates can cause a current account deficit to grow, in the presence of liberalised financial markets
PBoC's Zhou dismisses talk of renminbi devaluation ahead of G20 meetings
Chinese governor says country is 'opposed' to competitive devaluations; argues capital outflows likely to subside given 'strong fundamentals'