Economics
Cyclical price analysis needs major improvements – ECB paper
Researchers say DSGE models’ handling of housing prices is subject to errors
Fed could use rates to counter instability – Mester
2015 exercise showed major problems in use of macro-prudential tools, says Cleveland Fed chief
Book notes: The End of Theory, by Richard Bookstaber
Bookstaber provides an entertaining introduction to agent-based modelling – a potential new front for economics
Veteran economists weigh in on ‘rebuilding’ macro theory
Economists including Olivier Blanchard, Andy Haldane and Simon Wren-Lewis tackle the question of how – and whether – to save the DSGE model
One big bank falls short of ECB’s capital requirements
One bank falls short and a second comes close, although five banks failed the test in 2016
Google chief economist Hal Varian offers machine-learning insights
Varian says use of single-factor equilibrium models needs to give way to dynamic state approaches; he urges central banks to experiment, even though this will result in some failures
People: Fiji appoints deputy; Commission proposes new SRB chair term
Esala Masitabua will become deputy governor in Fiji on January 1, 2018; European Commission proposes extending Elke König’s mandate as chair of the SRB; and more
Constancio praises Reis’s studies of monetary policy
Work helped to open “new chapter in research on expectation formulation”
Haldane: BoE working to close ‘trust deficit’
BoE chief economist says mix of “layered” communications, public engagement and education is helping to overcome perception of aloofness
Globally active banks have made 'major changes' to funding mix – Spanish paper
Banks used funding from cross-border subsidiaries more after 2007, researchers say
Banking sector openness affects policy transmission, BoK paper finds
Bank of Korea study focuses on smaller open economies
NY Fed economists reveal big-data approach to nowcasting
Paper sets out the New York Fed’s model for producing early estimates of major indicators
Austrian paper takes detailed look at regulatory integration within EU
Researcher uses “bilateral nature” of EU reforms to help gauge effects
People: Deputies appointed in Hong Kong and Oman
HKMA picks deputy chief executive and new director; Oman appoints vice-president; Central Bank of Kenya has new comms chief
Irish economy significantly affected by shocks from UK, researchers say
Falls in UK growth and depreciation of pound have “sizeable” impact on Ireland, paper says
Interview: Edward Prescott
The Nobel Prize-winner speaks to Daniel Hinge about time inconsistency and real business cycle theory, and explains why there is no ‘productivity puzzle’
US income inequality boosted by top 0.01% – research
Income via “pass-through businesses” is a great contributor to top inequality
Paper highlights disparity in which fields of economics women enter
New York Fed study examines female participation rates in economics through conference case study, suggesting there may be barriers for women entering finance
Global factor playing bigger role in commodity prices, researchers say
“Single global factor” likely to be linked to demand, Banque de France paper finds
Senior figures disagree over future of central bank mandates
Independence for central banks has been a success and is vital for carrying out mandate; Otmar Issing says ECB should not act as a substitute for politics
Bank Indonesia under pressure from falling inflation
Bank Indonesia cuts rate for the second consecutive month; policymakers in Indonesia have been struggling to hit ambitious growth targets
Chicago Fed’s Evans sees little risk of inflation surge
Study by the Chicago Fed finds little evidence there could be a threshold in unemployment beyond which inflation may surge
SNB’s Jordan praises John Taylor legacy
The governor values how the Taylor rule has provided policy guidance, becoming an important benchmark
ECB paper attempts rigorous testing of economic sentiment
Researchers correlate economic data from 1985 to 2016 with measures of sentiment