Growth
Inflation, Fed policy and emerging markets: the good, the bad and the ugly
Steve Kamin explores the global implications of rising inflation and interest rates in the US
Rising spillover risks from macro-prudential policies
Tools used to restrict credit in specific sectors can increase the riskiness of credit in other areas, creating challenges in the use of household-specific and corporate credit-calming measures, write Lucyna Górnicka and Apoorv Bhargava
Bank of England holds interest rates and asset purchases
MPC wants evidence spare capacity is being reduced but Haldane votes for lower asset purchases
Charles Goodhart on inflation targets, financial stability and the role of money
The LSE professor says inflation targets should have been 0%, the Fed’s move to AIT is a mistake, independence is under threat from inflation, big balance sheets support liquidity, AI can help supervisors and climate stress tests are unconvincing
Uganda’s central bank cuts rates to historic lows
Uncertainty around the future path of Covid-19 weighs on growth prospects, governor says
It’s time to smash Iran’s endemic inflation
As Iran goes to the polls, high inflation is still plaguing the economy. Steve Hanke looks at solutions
Powell says US is recovering faster than expected
Majority of FOMC members now expect policy rate hike in 2023, with no decision yet on taper
Spanish governor favours green monetary policy
Hernández de Cos stresses ECB should account for climate risks in its price stability mandate
Germany facing ‘strong upswing’ – Bundesbank
Central bank revises 2021 GDP growth forecast from 3% to 3.7%
Global recovery is ‘double edged’ for EMEs – Carstens
“Too soon” to say whether inflation will be sustained but markets may overreact, says BIS chief
ECB poised to clarify tapering of PEPP purchases
Analysts agree central bank views higher inflation as transitory and will maintain rate of purchases
ECB policy paper says unconventional policy worked
Paper says QE purchases explain “lion’s share” of changes to eurozone yield curves
Inequality can worsen recessions – BIS paper
But authors say there is little evidence that income inequality affects consumption in normal times
A return of the inflation monster?
There are fears that a shift in intellectual approach towards running economies ‘hot’ could herald a return of the money-eating inflation era
The future of forward guidance
BNP Paribas Asset Management explores the current landscape around forward guidance, focusing on how central banks’ methods of communication are likely to evolve in the future. By Richard Barwell
Don’t dismiss inflation risks but don’t overreact, say central bankers
Sbordone, Smets and Vlieghe weigh up challenges for central banks in the “return towards normal”
The new era of money supply and its impact on policy
The empirical relationship between money and inflation has changed, writes Manmohan Singh, with Apoorv Bhargava and Peter Stella. To understand current policy challenges, we must first understand money creation
Book notes: The handbook of China’s financial system, edited by Marlene Amstad, Sun Guofeng and Xiong Wei
An important, comprehensive and informed overview of the current state of the Chinese financial system
UK regulators launch plan for less liquid fund structure
Aim is to allow productive investment for the long term while curbing vulnerabilities
BoE forecasts 7.25% UK growth in 2021
Bailey warns downside risks to the outlook remain
BoJ forecasts weaker inflation but stronger growth
Inflation still negative in Japan but likely to inch above zero this year, forecasts suggest
Sarb projects ‘sharp but incomplete initial recovery’
South African inflation forecast to rise on higher electricity and water prices
Book notes: Central banks as fiscal players, by Willem Buiter
Buiter puts a real economic problem into a convincing theoretical frame, and translates it into applicable policy advice
Rising rates could endanger emerging market recovery, IMF warns
“Divergent recovery” likely to create financial stability challenges, report says