Expectations
The evolving ‘strategy function’ in central banks
Some institutions participating in a survey of 27 central banks still struggle to fully harness an effective ‘strategy function’, according to the ECB’s Jean-Charles Sevet and Alejandro de la Cuesta
A rebuttal of Philip Turner’s criticism of the BIS ‘house view’
Robert Pringle critiques the key findings raised in Philip Turner’s occasional paper, ‘The new monetary policy revolution: advice and dissent’
Central bank of the year: The Federal Reserve System
Overwhelming Fed interventions in March 2020 forestalled a damaging global financial crisis, as policy overhaul prompts introspection in Europe and Japan
Bundesbank paper looks at German inflation expectations
Social media forms less realistic picture of current price levels than traditional news – researchers
Firms and consumers form expectations differently – Irish paper
Confidence leads eurozone firms to expect higher inflation, but consumers to expect lower, says research
Lifetime achievement: Charles Goodhart
The LSE and BoE veteran economist has his own ‘law’, and played a key role in the establishment of monetary policy in the UK, Hong Kong’s peg and the ‘New Zealand model’, which influenced a generation of central bankers
Expectations play key role in policy transmission – BoE paper
Authors use high-frequency data to assess importance of term premia and expectations
The Bank of Japan must adjust its monetary policy
Sayuri Shirai says the central bank needs to make its policy more sustainable. The BoJ is running out of ways to generate further monetary stimulus
Bank of Italy paper uses Twitter to track inflation expectations
New method’s data gives a “good real-time proxy” for consumers’ expectations – researchers
Adding QE can fix New Keynesian models – BoE paper
“Mild adjustments” to balance sheet are enough to avoid paradoxical results, authors find
The Covid crisis, central banks and the future
Crisis responses have had positive initial outcomes, but also exacerbated significant underlying challenges that raise concerns related to exit strategies and the future for central banks
Ulrich Bindseil on the launch of the digital euro
The ECB’s director-general for market infrastructure and payments speaks about the functionality, tiering approaches, privacy policies, ledger technology and ecosystem impact of the eurozone's planned CBDC
RBI paper tracks impact of rising transparency on expectations
Research uses text mining to study changing degree of transparency at the RBI
ECB says new data highlights stabilising effect of inflation expectations
Analysts argue that new approach to analysing surveys has “important practical advantages”
Firms and households form inflation expectations very differently – paper
Confidence in economy has strongly divergent effects, Central Bank of Ireland research finds
Hernández de Cos on ECB policy, crises responses and Basel reform
Spanish governor and Basel Committee chair Pablo Hernández de Cos favours a form of average inflation targeting, says ECB is willing to boost stimulus and Basel reforms not diminished by Covid-19 exceptions; stresses the need for structural reform and…
What does 2021 hold for the ECB?
Former officials reflect on AIT, how the strategy review may affect normalisation, QE options and the need for new tools
ECB is caught in a ‘communications trap’ – Issing
Monetary policy architect says ‘close to’ 2% inflation target was never part of original plan; urges ECB to reject Fed-like average inflation targeting
The dawn of average inflation targeting
The Fed has failed to explain how it will calculate the ‘average’ for its new AIT framework, raising new risks that central bankers would do well to reflect on
Otmar Issing on the art of central bank communications
EMU architect speaks about Draghi’s “whatever it takes” intervention, forward guidance failures, the Fed’s average inflation target ‘miscommunication’, and why the ECB may be overreaching in its strategy review
Monetary-fiscal policy co-operation and the ‘slippery slope’
Barry Eichengreen assesses the risks central banks face from their closer links to fiscal policy
Is there a path between the Covid abyss and chasm of financial risk?
Macro-prudential policies are being used to prevent economies from falling into the Covid abyss while also ensuring that a correction in ever-higher asset prices do not crush the economy. Are both objectives achievable?
Georgia’s Gvenetadze on implementing an aggressive reform agenda
The National Bank of Georgia governor speaks about efforts to improve monetary policy, financial infrastructure, financial literacy, transparency and ESG
Frank Smets on the ECB’s strategy review
The ECB’s DG of economics explains how expectations, communication, fiscal dominance, climate change and the Fed’s actions will be factored into the ECB’s delayed strategy review