Research
SNB paper challenges idea that capital flows drive Swiss franc value
Empirical study finds no strong relationship between capital flows and the level of the franc, meshing with earlier literature showing asset prices can move sharply without major portfolio shifts
IMF paper explores transmission of volatility along yield curve
Working paper finds differences in transmission between countries with established inflation-targeting frameworks and those in transition
Dutch central bank calls for pension reforms
Dutch pension schemes have “fundamental vulnerabilities” and need a “major overhaul”, DNB says; calls for variable contribution and accrual rates and “individual life-cycle investment policy”
BoJ research turns to new data set to study wage-price links
Research sheds light on factors that may push up wage expectations, drawing on a unique survey of Japanese expectations
ECB researchers add financial sectors to eurozone general equilibrium model
Modifications to general equilibrium model of eurozone allows proper modelling of domestic and cross-country effects of financial shocks, ECB researchers argue
BoJ economists shed light on quality-price dynamics
Study of large database of prices shows how firms take advantage of new product launches to raise prices partly due to higher quality and partly to maintain profits
LatAm policy-makers were possibly ‘excessively optimistic’ over economic potential, BIS paper says
Downplaying commodity super-cycle may have led to incorrect assessment of economic potential in Latin America, paper says; may have skewed monetary and fiscal policies
Shocks to bank finance hit exports, Bank of Italy paper argues
Exporters and non-exporters react differently to bank credit shocks, a Bank of Italy working paper argues; researchers present ‘unique firm-bank matched database’ for Italian businesses
Measures needed to keep married women in wage sector in Sub-Saharan Africa, paper finds
Working paper examines gender gap in labour markets in Burkina Faso, Ghana, Mauritius, Rwanda and Zambia; finds education opens opportunities, but they can diminish after marriage
Liikanen calls for more macroprudential tools in Finland
Bank of Finland governor says new tools should be provided before there is a need to use them; warns of risks associated with growing debt-to-income ratios alongside weaker long-term growth
IMF paper points to short-term benefits of product market reforms
Authors find product market reforms can deliver benefits in short term as well as long, though effects may be curtailed where credit is constrained
Micro factors affect Italian banks’ sovereign debt purchases, paper argues
Italian banks’ sovereign debt purchases strongly affected by their balance sheet needs, Bank of Italy researchers argue; size of bank a key factor
Low rates driving up housing share of income – RBA paper
Share of aggregate US income from capital is on the rise, and housing accounts for a large portion; low nominal rates explain strong demand for housing, economist argues
Chile expands dollar holdings, central bank annual report shows
Central Bank of Chile reserve allocations in euro, Canadian dollar and Australian dollar fall, as dollar holdings rise
Japanese inflation target a partial success – Fed paper
Authors show adopting inflation target during a liquidity trap can have powerful effects, but in the Japanese case it seems to have been weakened by other factors
ECB paper considers impact of loss in collateral value
Research examines how a loss in value will impact the wider economy by studying the effects of a legal reform in Sweden in 2004; sees potential for ‘negative consequences’
External factors most important inflation driver, Mauritius survey shows
Inflation expectation shows 71% of stakeholders asked believe external environment is most important factor in inflation pattern; exchange rate viewed as second most important
Strong anti-inflationary monetary policy helps mitigate uncertainty shocks, Italian paper says
Central bank has better chance of mitigating uncertainty-driven recessions by following Taylor rule with high weight on inflation, paper finds
ECB paper considers impact of banking shocks on Portugal
Researchers examine impact of different types of credit supply shock on the Portuguese economy from 2005 to 2013; shocks to large banks may have had large impact on total investment
Hitting inflation targets may be harder now, thanks to lower bound – paper
Working paper warns of potential for lower bound episodes to affect expectations of when they will occur in future, something that can act as a drag on inflation in the present
ECB papers take detailed look at bond market data
Two papers from the European Central Bank take a detailed look at data on the development of credit spreads in eurozone corporate bonds
Norges Bank paper offers insights on when to ‘lean against the wind’
Norges Bank working paper investigates the extent monetary policies should actively aim at mitigating the build-up of financial imbalances; using rates to curb credit growth could lower output
BIS paper: money growth-inflation link weakens, credit link grows
Authors find money growth is less important in driving price changes, but credit growth is becoming a more critical factor in financial crises
Slow growth need not be the ‘new normal’ – Richmond Fed paper
Authors give reasons for optimism about the future of US economic growth, and outline policies that could support it, although most are outside the control of the central bank