Research
French paper warns of banks precipitating crises through hoarding
Research develops new ‘domino effect’ model, examining how banks may bring about crises by attempting to protect themselves
New DSGE model finds anticipated 'low for long' policy can cause a boom
Finnish paper, inspired by US policy of the early 2000s, finds combination of too-low-for-too-long interest rate policy and optimism leads to an increase in overall leverage
Interest rate forecasts ‘constrain’ central banks
Norwegian paper finds that Norges Bank and Reserve Bank of New Zealand are ‘reluctant to deviate’ from interest rate paths they have previously published
IMF researcher proposes new method for top-down stress testing
New, simple methodology for structural market-based top-down macro stress tests aims to overcome onerous data requirements
Sri Lankan central bank reveals inflation spike in 2012
Sri Lankan annual report says economic growth, while still strong, fell in 2012 while inflation rose sharply; central bank increased reserves by 15%
Polish paper scrutinises interest rate holds
Research finds that central banks keep interest rates unchanged on majority of occasions; proposes model that distinguishes between rate-holds in period of tightening, easing and neutrality
New model prescribes strongly counter-cyclical medicine for financial shocks
Working paper from the Bank of Canada suggests counter-cyclical bank capital rules can help steady the ship in the wake of financial shocks, in tandem with monetary policy measures
ECB paper examines shifts in fiscal regimes
Study finds responsibility for stabilising debt levels has swung between monetary and fiscal authorities in UK, Germany and Italy; most clearly defined in UK
Accumulating reserves to guard against inflation is 'misplaced'
Researchers at Bofit institute find that using reserves as a ‘bulwark against goods price inflation' is a mistake; say best protection against costly reserves accumulation is flexible exchange rate
Payment pricing preventing electronic migration in Ireland
Article in central bank’s quarterly bulletin finds Ireland could save €1 billion by switching from cheques to a more efficient payment instrument
Chilean paper finds room to reduce risk by diversifying investment in Brics
Statistical analysis finds little co-integration of stock market vectors in Latin America and the Bric countries; says this gives investors a good opportunity to diversify, which would reduce risk
IMF paper uses monetary model to explain term premium
Study says central bank supply of liquidity influences asset prices; argues that this relationship can explain greater proportion of term premium than non-monetary models
Contribution of Irish financial sector to GDP ‘overstated’
Paper questions the statistical methodology behind claim that Irish financial sector contributes €15 billion to country’s output
Chilean paper finds central bank’s forecasts influence private sector expectations
Working paper finds evidence the private sector updates inflation expectations based on the Central Bank of Chile’s forecasts; suggests more central banks should publish forecasts to aid policy
Czech research examines macroprudential policy in small economies
Policy note stresses the importance of considering cyclical systemic risk when setting macro-prudential policy in a small EU economy
IMF working paper examines monetary policy ‘leaning against the wind'
Monetary authorities that want to stimulate the economy while maintaining financial stability should cut deeper, but then raise rates again faster
BIS paper urges statistics expansion
Research tells policy-makers to take advantage of the ‘sense of urgency’ that follows financial crises to expand the data they collect, including more comprehensive information on banks
Bundesbank research finds strong role for China in global inflation dynamics
Discussion paper weighs cross-border effects of supply and demand shocks in China; results suggest Chinese shocks explain an average of 5% of total inflation across countries
Portugal must strengthen institutions to attract foreign direct investment - working paper
Bank of Portugal researchers call for a focus on corruption and strengthening the independence of the financial system to increase attractiveness for FDI
IMF paper recommends China adopt ‘better-targeted’ macro-prudential policies
Study encourages China to tailor macro-prudential tools to regional and economics differences in country’s banks; suggests coupling policies with greater commercialisation
Norwegian paper finds implicit intra-day interest rate in UK money market
Research says that – in the absence of contractually binding repayment time – there is an implicit cost of delaying payments in the UK’s overnight money market
Bundesbank researchers test if higher inflation could ease public debt burden
Paper finds 'minor effect' on public debt from a raised inflation target, and would only be felt over a long time-frame
Fed working paper measures FOMC comms effect against theory of UIP
Paper finds 'little evidence' for a changed relationship between FOMC announcements and US interest rates since the 'onset of the zero lower bound'
ECB paper finds initial response to financial crisis was not good enough
Working paper suggests policy up to end of 2011 was insufficient to reduce credit availability problems for small businesses, underlining the importance of more recent innovations