Research
Using inflation to erode the US public debt
Paper examines relationship between size of debt and the temptation to inflate
Explaining wage stickiness
Bank of Estonia research suggests workforce composition, factors in individual countries and a positive relationship with competition all explain the downward rigidity of earnings
‘Nothing to fear but FEER itself’: CEPR paper
Centre for Economic Policy Research paper argues that there are payoffs to be had with the more sophisticated versions of carry trade strategies
BoJ’s special funds operation most effective for CP market
A Bank of Japan paper argues that outright purchases and repo operations were only briefly effective compared to the authority’s special funds operation
BIS on how to make stress tests better
Research examines the reasons for poor performance of stress tests pre-crisis and notes implications for their design and conduct in the future
Growth determinants revisited
International Monetary Fund research returns to the issue of cross-country growth empirics debate using a novel model
Unconventional monetary policy reviewed
Claudio Borio and Piti Disyatat set out a framework of definitions to help categorise and clarify the functions of various monetary policy tools, and assess central banks’ actions since the crisis
Reflections on liquidity crises: Borio
The BIS’s Claudio Borio discusses ten propositions on liquidity crises, including the importance of improving buffers and the need for principles on central bank liquidity provision
Influences on crisis fighting in emerging markets
International Monetary Fund examines why some emerging-market economies took special-liquidity-easing measures during the crisis
Monetary policy in preventing boom-bust housing cycles
Bank of Canada paper argues that central banks should react less to inflation and more to output to avoid making boom-bust cycles worse
Fed behaviour matches optimal target rule
A discussion paper on the Fed and monetary policy rules argues that an optimal target rule, rather than the Taylor rule, best explains the central bank’s policy behaviour
Unconventional policy affects both sides of balance sheets
Bank of Japan looks at the size and composition of its balance sheet during its quantitative-easing period
Fiscal stimulus crucial for recovery
Centre for Economic Policy Research (CEPR) compares the Great Depression with the global credit crisis
Linking banks, bonds, and firm size
San Francisco Fed paper builds a model to see the effects of bank vs. bond financing on firm size
New household inflation measures yield “novel finding”
San Francisco Fed paper finds a negative correlation between inflation and inflation inequality
Finance and real economy closer since 1980s
European Central Bank looks at the role of financial markets in anticipating business cycle developments
The relationship between money, credit and policy
A new paper finds evidence that the relationship between money and credit changed after the second world war
IMF to Hong Kong: beware of bubbles
International Monetary Fund looks at the potential macroeconomic implications for Hong Kong of accommodative monetary policy in the United States
The relationship between deregulation and firm volatility
Federal Reserve paper finds evidence from the 80s suggesting volatility declined as a result of interstate deregulation
Zero lower bound may have cost US $1.7 trillion
San Francisco Fed’s John Williams argues zero bound on interest rates has had negative effect and could continue to do so
Take time to revise international financial architecture
Central Bank of Argentina believes reform of international financial architecture can wait until crisis abates
Base countercyclical provisioning on expected losses
Bank of Italy looks at Spanish dynamic provisioning
Accounting overstates banks’ health: IMF paper
International Monetary Fund research finds banks not as healthy as their balance sheets suggest
Foreign demand for currencies and the Friedman rule
A new paper from two economists at Columbia University finds that the Friedman rule ceases to be Ramsey-optimal when foreign demand is taken into consideration