Research
Avoid absorbing default losses, central banks told
Central banks should beware of injecting funds aimed at absorbing losses associated with defaults to provide risk sharing, according to research published by the Bank of Canada.
Paper on inflation targeting
This research paper shows how the inflation-targeting regimes of Australia, Canada and New Zealand, has developed over time.
Paper on the price level stability
This research paper from the Bank of Portugal provides an overview of the arguments for assessing the case for price level path stability (PLPS).
Financial market perceptions of recession risk
Corporate credit spreads embed key information about the likelihood of recession one year ahead.
How monetary policy responds to uncertainty
Under conditions of uncertainty, optimal monetary policy responds more to price and wage inflation than to natural-rate terms, according to research published by the Federal Reserve.
The impact of innovation on systemic risk
The pace of financial innovation has led to an increasingly complex and interconnected financial system. But what effect does this have on systemic risk?
FDI and technology: emerging markets evidence
The impact of foreign direct investment on the real economy is unrelated to the level of technology in which the investment is made, according to a paper published by the Centre for Economic Policy Research.
Is a price or inflation target best for stability?
A paper looking at the costs and benefits of price-level and inflation targeting as tools for stabilisation policy has been published by the Bank of Canada.
External rigidity is behind lumpy price adjustment
External rigidity, not infrequent price changes, is the reason for large adjustment costs, research published by the Banque de France finds.
Non-bank financial firms' impact on the eurozone
The growth in the amount of deposits held by financial institutions other than banks in the euro area has led to the integration and deepening of the region's financial markets and a shift in the attitude of investors towards risk, research by the…
Commission's data on euro-area inflation misleads
The balance statistic, used by the European Commission to gauge inflation perceptions, is a poor measure of actual inflation, research published by the Bank of Portugal finds.
Policy solutions to crime and joblessness compared
Need to lower unemployment and crime? Then, according to the Cleveland Federal Reserve, the best policy is to introduce wage subsidies.
Inflation expectations firmer in euro area than US
Long-run inflation expectations are anchored more firmly in the euro-area than in the US, according to research published by the Centre for Economic Policy Research.
EMU leads to bond-market convergence
Economic and monetary union in Europe has led to substantial convergence in euro-area sovereign bond markets, according to research published by the San Francisco Federal Reserve.
Share options spur CEOs to take more risks
Granting employee stock options motivates CEOs of banking firms to undertake riskier projects, research published by the New York Fed has found.
Does monetary policy impact banking spreads?
The nominalisation of interest rates has led to a breakdown in the relationship between banking spreads and monetary policy in Chile, argues a paper from the central bank.
Buybacks in Treasury cash and debt management
The New York Fed has published a paper looking at the use and implications of buybacks in Treasury cash and debt management.
Competition found to impact bank risk
Banking stability may be undermined by competition, according to research published today by the San Francisco Fed.
Relationships help for IPO performance
Investors prefer initial public offerings (IPOs) managed by relationship banks than similar ones managed by outside banks, according to research by the Chicago Federal Reserve.
Do trade costs explain macroeconomic puzzles?
Research published by the Reserve Bank of Australia finds some evidence that trade costs do, at least in part, explain three monetary policy puzzles; the purchasing power parity real exchange rate persistence puzzle, the Feldstein-Horioka saving…
Can rainy-day funds make a difference in Europe?
The Bank of Italy has published a paper looking at whether rainy-day funds, which US states (who usually have to balance their budgets) use to limit procyclical fiscal policies, have a role to play in European fiscal policy.
Differing results on investment adjustment costs
A Bank of England paper evaluating the costs of changes in investment shows the elasticity of investment with respect to the shadow price of capital (the value to the firm of one additional unit of capital) to be 15 times larger than aggregate models…
Instability fundamentals have weathered revolution
The financial fundamentals that hold the key to the dynamics of instability remain despite three decades-worth of structural change in the system, according to research published by the Bank for International Settlements.
Hong Kong benefits from mainland growth
Hong Kong's status as an international financial centre will be enhanced by the rise of mainland China, according to research published by the Hong Kong Monetary Authority.