Economics
Wages more sticky in the US than in Japan, BoJ paper finds
The empirical fit of the New Keynesian Wage Phillips Curve is generally superior for Japan, auhors note; inflation indexation plays a key role in the US, but is less important in Japan, they add
Security of hard pegs ‘illusory', IMF economists find
Re-examination of exchange-rate regime orthodoxy finds hard pegs are too risky, but 'managed floats' can have 'significantly lower risks'
IMF paper finds remittances depend on source and recipient country business cycles
Level of remittances are negatively correlated with strength of recipient economy and positively with source economy; when both are weak, remittances continue, study shows
US Congress fails to sign off on IMF reforms
Sweeping modernisation package put together by G-20 in 2010 stopped in its tracks as House of Representatives declines to double quota increase and thus ratify changes to fund's governing structure
Fiscal policy can counteract Dutch disease, say Peru economists
If the gains from public investment are shared throughout an economy, then such government spending can counteract the harmful effects of Dutch disease
RBA's Stevens says 2013 ‘not as bad as feared'
Reserve Bank of Australia governor tells parliamentarians there will be turbulence ahead when the Fed starts to ‘taper'; reminds that monetary policy alone cannot kick-start economic growth
Chinese liberalisation could be ‘force for global stability', says BoE economist
Article in Bank of England quarterly bulletin says a more open capital account in China could be a force for growth and financial stability at home and abroad
Chicago Fed paper aims to explain asset fluctuations through ‘unified' model
Framework draws on two theories of the role of credit in asset price fluctuations; study is first step in larger project
Financial crisis hit Australian inventories, paper finds
RBA researcher tests theory that tight credit conditions caused Australian companies to reduce their inventories, and includes a case study on the automotive industry supporting the hypothesis
HKMA’s Yue calls for offshore RMB co-operation
Deputy chief executive Eddie Yue says Hong Kong and the United Kingdom need not compete for a slice of the global offshore renminbi market – they can ‘grow the pie together’
IMF's Lipton says Germany faces grave risks from global 'mismanagement'
Fund's first deputy managing director pleads with European powerhouse to 'lift its sights to the global horizon as well' as it carries on the work of the European project
G-20 inflation measure paves way for co-ordinating policy
New statistic aims to fill ‘data gap' identified in wake of the global financial crisis; follows growing calls for globally coordinated monetary policy as countries fret over effects of QE
BoJ research proposes new method for ‘nowcasting’ GDP
Paper designs static factor model using ‘ingredients’ of official quarterly GDP statistics to estimate growth over a shorter time horizon
HKMA’s Yue focuses on renminbi as China liberalises capital markets
Deputy chief executive Eddie Yue believes the renminbi will be ‘crucial’ in managing impact of China’s capital account liberalisation on global markets; hosts forum with UK government official
Fedwire data can give accurate picture of interbank fed funds market, paper shows
NY Fed researchers find Fedwire-derived data on fed funds borrowing are strongly correlated with the figures subsequently reported by banks
BoE economist creates ‘nowcast' composite from global indicators
Combined indicator weights global indexes such as PMI and CPB world trade to ‘nowcast' world economic activity more accurately than before
Bundesbank economists propose composite FSI with real economy predictive power
Composite financial stress indicator is better at predicting developments in the real eurozone economy than volatility indexes that are currently commonly used
Surpluses of Germany and China feed global imbalances, BIS research finds
Bank for International Settlements paper compares current account and creditor positions of Germany and China, finding Germany’s surpluses to be more resilient in the face of the global financial crisis
NY Fed staff say effect of policy changes depend on risk environment
New staff report argues that macro policy announcements affect asset prices to different extents depending on the existing economic outlook; when risk is elevated, the impact is reduced
IMF paper considers impact of China’s capital account liberalisation
Researchers suggest that reduced capital control will likely lead to net outflows from equity and bond markets as domestic investors look to diversify
Ireland economists construct new business-cycle indicator
Economic letter published by Central Bank of Ireland presents an indicator to provide policy-makers with ‘real-time’ signals; index has declined in recent months as domestic demand remains weak
Czech study finds DFM ‘nowcasting' adds value in calculating real-time GDP
Dynamic Factor Model ‘nowcasting' is as accurate as the judgemental method currently used by the Czech National Bank; a simple average of the two results is more accurate than either on its own
US households stick with favourite payment methods
According to a recent study, households use ‘one or at most two' of cash, cheque and card when paying the bills
Spanish paper preaches caution over DSGE models
Researcher finds that DSGE models would not have proved any more use to policy-makers in the 1970s than their ‘old-style’ Phillips curves; warns against putting too much faith in their prescriptions