Economics
Collateralisation of borrowing may reduce bank resolution costs
This ‘net benefit' should result in lower overall funding costs and thus a lower probability of distress despite increasing encumbrance of the bank's balance sheet, according to a recent IMF paper
Richmond Fed paper examines sovereign debt duration
Working paper models trade-off between issuing shorter or longer-term debt; governments could be choosing the wrong durations by missing the ‘debt dilution’ problem
Czech paper examines interbank risk premium
Research finds counterparty and liquidity risk are ‘potentially significant determinants’ in the departure of interbank rates from key policy rates in Czech Republic
Polish economists call for dismantling of eurozone, and new role for ECB
Former Polish vice-minister of finance and bank chief economiss call for Germany to lead an exodus of the eurozone's strongest economies, to save the European Union
Lagarde advocates closer European integration
IMF managing director tells Romanian audience the ‘right future’ for Eastern Europe is greater integration with its EU neighbours; implores region not to turn its back on European project
Crisis altered ‘traditional factor' impact on EM capital flows, new paper finds
According to the authors, the crisis ‘brought very important changes in terms of degree, size and volatility of capital flows to emerging markets'
Policy adjustments could create 1.7 million additional South African jobs, new paper argues
‘The combined impact of reducing transport and communication costs, reducing the skill constraint, and increasing foreign direct and domestic investment' could increase potential growth to 8%
IMF cuts global growth forecast as capital outflows hit EM economies
Global growth is projected to remain slightly above 3% in 2013; fund says risks of a longer growth slowdown in emerging market economies ‘have increased'
Euro area bank lending restricted by sovereign debt exposure, say DNB researchers
There is a direct link between deteriorating creditworthiness of foreign sovereign debt and lending by banks holding such debt, according to a working paper from the Dutch central bank
No ‘significant' correlation between declining bank credit and growth, BIS paper finds
Real exchange rates and public debt, however, show a statistically significantly correlation with recovery
Overlooked global factors have major impact on long-term interest rates, IMF paper says
Research paper says the explanatory power of domestic variables on rates is weak compared with global fiscal and monetary policy stances
Fiscal multiplier tends to double in times of crisis, Bank of Portugal paper shows
The paper analyses the size of short-run fiscal multipliers in both normal and crisis times
Sri Lankan central bank defends GDP figures
Central bank hits back at accusations of overstated growth figures in latest annual report; insists it follows international best practices
Swedish paper finds benefit in increasing lag-length in VARs
Working paper says it is possible to estimate structural vector autoregressions with long lags and still obtain precise structural predictions
IMF research quantifies distributional damage from fiscal consolidation
Working paper suggests efforts to cut budget deficits in advanced economies have raised inequality, cut the wage income share of GDP and pushed up long-term unemployment
Japanese paper finds income elasticity of money demand has fallen over time
Update to 1996 paper finds cross-sectional income elasticities of money demand have plunged since the 1980s, to below one in the late 2000s
Bank of Spain researchers find fiscal multiplier far greater in turbulent times
Researchers find recessions and banking stress amplify the effect of government spending on the economy – but also that the effect is severely tempered by weak public finances
ECB research dissects European competitiveness
Working paper separates competitiveness into political and factor price-driven elements; uses new index to show divergent outcomes across Europe
IMF’s Zhu examines impact of changing global relationships on Asian economies
Min Zhu, an IMF deputy managing director, discusses the move towards a global supply chain and the challenges it presents to the development of the Asian financial markets
Fijian governor praises private investment but concerned by export slump
Barry Whiteside attributes Fiji’s return to growth to the increase in private sector investment; urges export sector to ‘improve quickly’ to prevent further slide in trade deficit
IMF expects Fed to hold QE steady until 2014
IMF releases Article IV consultation with United States; praises impact of Federal Reserve's asset purchases but criticises ‘excessively rapid and ill-designed' deficit reduction
Bank of Finland expects continuing recession in 2013
Central bank lowers its growth forecasts for next three years, saying GDP will contract by 0.8% in 2013 while unemployment will rise to 8.6% the following year
Fed research models optimal monetary and fiscal policy under uncertainty
Discussion paper seeks to improve on previous models by introducing uncertainty; finds it is optimal for the government to spend more at the zero lower bound under uncertainty
RBA researchers test new BVAR-DSGE method on Australia
New modelling technique aims to overcome small, open economy issues in previous attempts to combine Bayesian VAR and DSGE methods