Economics
Larry Summers on stagflation risks, lessons from Delphi and never-ending ‘punch’
The former US Treasury secretary speaks about fiscal ‘overexpansion’, Fed/Treasury debt discord, the pitfalls of ‘unknown unknowns’ and central bankers ‘unable’ to remove the ‘punchbowl’
Inequality sharpens monetary policy’s effects – ECB paper
Author analyses “inequality channel” using model with three types of heterogeneous agent
Agustín Carstens on BIS strategic priorities, innovation and central bank policy
The BIS general manager speaks about policy trade-offs at critical time, tackling NBFIs and the dearth of ‘green’ assets, tech collaboration, and why he favours Biden’s $3.5trn infrastructure bill
Bundesbank paper looks at short sellers in the pandemic
Short sellers saw Covid-19 would strongly affect fiscally constrained countries - paper
BDF paper analyses banks’ capital buffers
Researchers suggest new approach to setting banks’ structural and cyclical reserve levels
Book notes: Robert Triffin, by Ivo Maes with Ilaria Pasotti
Triffin’s story is well told by Maes, whose extensive personal and academic research shines through on page after page
Central banks set monetary policy around eight times a year
African central banks reported setting monetary policy less frequently than peers
Strategies for change: central banks’ quest for diversity
Dedicated diversity strategies remain uncommon among central banks, despite growing recognition of the need for better minority representation
Policy-makers and staff often determine headline forecasts
Joint approach may help conquer systemic bias
Majority of central banks do not take account of forecast errors
Surveys of inflationary expectations used widely, alongside macroeconomic and market indicators
Some philosophical questions about the future of central banking
Kenneth Rogoff weighs up the many challenges facing central banks in the years ahead, from debt and inflation to negative rates and the dangers of ‘mission creep’
Dutch households to keep most pandemic savings
DNB still expects strong recovery in household consumption if social distancing measures are lifted
Jackson Hole conference switches to online-only model
Kansas City Fed cancels Wyoming get-together, citing Delta variant
How we can improve gender diversity in economics
Mary Suiter and Oksana Leukhina say gender diversity in economics must be championed
Eurozone returns to growth in Q2
Employment increases, but economic expansion is uneven across economies
Link between US labour costs and inflation has weakened – ECB paper
US can sustain robust labour markets without risking inflation outbreak, researchers say
People: Georgia names new vice-governor
IMF appoints director of HR; Kuwaiti emir makes delayed board appointments; Indonesia shuffles regional reps
Why diversity matters for economic policy
The head of the Cleveland Fed's new Program for Economic Inclusion, Dionissi Aliprantis, explains why diversity should be an important factor in the US central bank's decision-making
The IMF’s $650bn SDR allocation and a future ‘digital SDR’
Focus is needed on widening SDR use in payments and the creation of a ‘digital SDR’, to support a large allocation of ‘official’ IMF SDRs, writes Warren Coats
Ignoring fire sales weakens stress tests – Bank of Austria paper
Paper presents new method for calculating effects of deleveraging by distressed banks
BoE’s Vlieghe: central bankers must speak up about economic fragility
Outgoing MPC member says impact of debt and inequality is “stark”, but goes beyond central banking
Macro-pru can help avoid ‘reversal interest rate’ – Bundesbank paper
Use of capital ratios can aid eurozone monetary policy, researchers say
Paper analyses eurozone consumers’ inflation expectations
Short-term views, trust and Covid-19 shaped medium-term expectations – Bank of Finland paper
BdF paper analyses inflation tolerance ranges
Ranges “should not be zones of inaction” and may have unfavourable trade-offs, researchers say