Research
BIS paper models optimal response to unconventional shocks
Authors examine how macro-prudential policy ought to respond to news shocks and regime changes in global liquidity, finding ‘significant variation’ in optimal policy reactions to shocks
Bundesbank research tracks changing financial cycle
Discussion paper seeks to establish the ‘empirical regularities’ of the financial cycle using an econometric model, finding the cycle has grown longer and more severe over time
BoJ paper finds emerging markets struggled to protect themselves from QE
Foreign exchange interventions and capital flow policies did little to shield emerging markets from the spillovers caused by quantitative easing in the US
ECB article examines lack of real convergence in eurozone
Article in latest bulletin points to three factors behind the lack of sustainable real convergence among the countries in eurozone since the creation of the monetary union
Bank of Korea research tots up damage from capital flows
Researchers attempt to measure the impact of foreign financial flows on the real economy, finding the type of flow matters for growth, but all types increase volatility
BoJ paper builds model of secular stagnation
Authors find scrapping the idea of a single representative household allows New Keynesian models to portray secular stagnation – and a high inflation target fixes the problem
Bank of Korea researchers dig into disaggregated data on inflation targeting
Adopting inflation targeting in Korea lowered the mean, volatility and persistence of inflation throughout the country, but a look at disaggregated data reveals more about transmission
Bundesbank paper identifies two ‘clusters’ of credit cycles
Researchers find there is no common credit cycle among European and US economies, rather two distinct groups emerge with cycles converging within
IMF paper offers Uruguay advice on money supply targeting
Move to new monetary policy target has proved ‘challenging’ IMF researchers note, offering advice on how to make the framework more effective
Belgian paper examines ‘crisis-proof’ services
Working paper finds ‘significant’ differences between the elasticity of goods exports and services exports with respect to GDP growth during the crisis
Dutch paper contradicts ‘conventional view’ on fiscal adjustments
Working paper cannot rule out that increasing revenues is just as effective at bringing about fiscal adjustment as spending cuts
Dutch paper compares measures of systemic risk with market perceptions
Working paper notes the need for ‘careful consideration’ of the impact of prudential policies on both bank risk and systemic risk
IMF paper: commodity prices are largely demand-driven
Working paper explores systemic risk, aggregate demand and commodity prices, finding the latter to be largely demand-driven, a conclusion they extend to non-core inflation
Italian paper explores wage and unemployment relationship
Occasional paper stresses the choice of measures for the change in wage rates has ‘important consequences for the results’
Bundesbank paper tracks causes of financial crisis balance sheet contraction
Working paper identifies characteristics and behaviour that had a dampening effect on German banks during the 2008 crisis, noting the importance of taking a nuanced view
IMF paper offers advice on Asian financial integration
Authors suggest improvements to the sharing of information, trade integration, capital market development and a common regulatory framework to improve financial integration in Asia
IMF researchers find FX interventions can help tackle pressures from global capital flows
Working paper penned by team including Olivier Blanchard takes new approach to endogeneity problems, finding foreign exchange interventions can stem appreciation pressures from global flows of capital
Bank of Italy sees credit conditions improving
Economic bulletin notes the ability of banks to borrow cheap funds from the ECB is helping improve conditions, but stock of NPLs is still holding back lending growth
Greek paper shows ‘vicious circle’ between political corruption and tax evasion
Working paper finds ‘strategic complementarities’ between citizens and politicians in model, noting ‘strong moral values’ can help boost policies aimed at deterring tax evasion
Dutch bulletin: T2S can only succeed if ‘many’ CSDs sign up
The Netherlands Bank's latest bulletin highlights the importance of more CSDs in Europe signing up to the Target2-Securities platform since the initial migration in June
Colombian paper paints nuanced picture of bank risk and efficiency link
Researchers find some efficiency gains from better capitalisation, but results differ depending on whether a bank is large or small, domestic or foreign
BoJ paper finds short and long-term expectations are anchored differently
Inflation expectations respond differently to changes in policies and inflation depending on whether they are short- or long-term, researchers find
Minneapolis Fed research separates Greece and Puerto Rico debt crises
Staff report notes the debt crisis has spilled over to the private sector in Greece but not in Puerto Rico, given the latter’s inability to interfere with private external debt contracts
IMF paper identifies countries that ‘pass through’ spillovers
Individual countries can amplify, absorb or block spillovers, depending on their economic and structural characteristics, researchers at the IMF find