Macroeconomics
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
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
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
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
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
IMF stays tough on debt relief as it prepares to return to Greece
Maurice Obstfeld and other top officials stress the fund’s demands on debt sustainability; mission to return to Greece next week
FOMC sentiment effects tested with ‘computational linguistics’
Economists find sentiment conveyed by FOMC statements affects policy expectations, inflation, and industrial production
IMF paper examines bank lending in Saudi Arabia
Despite low oil prices, credit to the private sector “remained robust”, but an overreliance on banks financing the deficit needs to stop, author says
IMF authors build network model of trade fragility
Network theory helps authors unpick the effects of a supply shock on the “highly interconnected” global trade system
Asia needs new growth model – BoJ’s Kuroda
Region can no longer serve as “the workshop of the world” as the trade in goods slows down, says the Bank of Japan governor
Economics in central banking: Leo Krippner
His work on term structure modelling has helped central bank policy-makers to track the effects of unconventional policies and it raises many interesting possibilities for future research
Consumption shows asymmetric response to shocks – BoE paper
Households appear to respond more strongly to temporary negative shocks than positive ones, and effects are different for borrowers and savers
Fiscal rules fail to tackle EU policy biases – IMF research
Many biases relate to political economy factors, and should be tackled by future adjustments to the governance framework, IMF economists say
Brexit pain may be coming – panel
Former Bank of England officials warn of fading consumer spending and investment
BIS authors identify tipping point in household debt impact
Researchers trace the effects of household debt on the real economy, identifying thresholds beyond which the long-run impact on consumption and growth intensifies
CLS signs MoU with Chinese think-tank
The forex utility will work with the National Institution for Financial Development to support the renminbi’s internationalisation
LatAm should pursue regional financial integration – IMF paper
Timing is “ripe” for region to pursue financial integration as means of counterbalancing effects of departing global banks, authors say
BIS paper finds Fed’s QE had little discernible impact on real economy
Results are still preliminary, authors say, but “cast some doubt” on the effectiveness of US quantitative easing
BIS paper presents evidence on Uruguayan price setting
Authors develop survey-based measure of firms’ price-setting behaviour, which may prove useful for research on other emerging markets
Eichengreen sees danger in US fiscal stimulus
Veteran economist warns infrastructure spending in the US may prove damaging to both the domestic and global economy, without necessarily fixing secular stagnation
Azerbaijan raids oil fund as central bank reserves dwindle
President allocates chunk of oil fund to top up central bank reserves, as pressure on the manat continues