Growth
In search of a better measure of inflation
Hedonic adjustments offer a way of tackling bias in the CPI, albeit at a cost, but new research suggests even these may be misrepresenting inflation – with broad implications for the economy
BoE unearths new evidence on UK productivity puzzle
Latest inflation report includes new research suggesting temporary ‘compositional’ factors may be dragging on productivity growth; inflation path revised up slightly and growth down
Bundesbank paper finds misbehaving banks increase volatility
Model of imperfect information shows output becomes more volatile when depositors cannot fully hold bankers to account
‘Climate of greater optimism’ prevails in Spain
Financial stability report identifies many signs the economy has turned a corner and financial markets are beginning to recover, although credit to the private sector continues to fall
San Fran Fed research analyses link between inflation targeting and growth
In an economic letter, two researchers find developing economies tend not to experience the same short-term bump in growth rates as advanced economies after adopting a target
Argentina cabinet chief rejects analysis in IMF report
Argentina needs ‘tighter macroeconomic policies, a weaker exchange rate and less microeconomic distortion,’ argues IMF outlook; cabinet chief dismisses analysis
IMF paper analyses Islamic banking impact on economic growth
Islamic banking is ‘more flexible against shocks and more inclusive with regards to growth’, finds an IMF working paper
IMF projections may be ‘too pro-cyclical’ warns Vergara
Central Bank of Chile president questions whether a drop in productivity has occurred recently, suggesting potential growth was actually ‘lower than previously thought all along’
IMF paper proposes refinements to potential output estimation
Researchers use an adapted ‘multivariate filter’ that aims to improve upon other methods of estimating potential output, although they admit the result is probably only the ‘least worst’ option
Lagarde warns mediocre growth could become ‘new reality’
The "global recovery continues, but it is moderate and uneven", argues the IMF managing director, warning mediocre growth has the potential to become the "new reality"
Varoufakis defends reshaped Greek reform agenda
Greek finance minister says extension bought time for a ‘serious conversation’ with creditors and outlines ways in which he wants reforms to differ from troika prescriptions
BoE’s FPC flags climate change financial stability risks
Financial policy committee divides issue into physical risks and transitional risks, seeing some potential for instability from climate change but calling for further research
IMF calls for demand boost to avoid 'new reality' of lower potential
IMF World Economic Outlook contains echoes of Larry Summers' view that the world's economies need shock therapy to avoid secular stagnation
Fed paper measures damage from capital flow surges
Researchers find surging capital flows push labour away from manufacturing, create sudden booms and recessions, and do more damage if there is a sudden reversal
Romer and Romer find financial crisis impact ‘not large’
NBER working paper constructs new series on financial distress in advanced economies to better capture degrees of financial crisis; finds output declines are ‘moderate and largely temporary’
IMF tells SNB to consider asset purchases
In the face of slowing growth and deepening deflation the Swiss National Bank should ease monetary policy, which could be done via purchases of foreign currency assets, IMF says
Bank of Israel studies economic damage from conflict
Latest hostilities between Israel and Palestine cost the Israeli economy around 0.3% of GDP, with effects stemming from falling tourism and lower consumption, annual report finds
BoJ’s easing boosts inequality, warns IMF paper
Working paper finds attempts to meet Japan’s 2% inflation target are increasing income growth and inequality; calls for structural reform to make this growth more inclusive
Norges Bank faces ‘ripple effects’ from oil price collapse
Norway heading in opposite direction to generally favourable global trend, central bank’s annual report warns; banking sector profitable and resilient nonetheless
Weakest economic data in years puts pressure on PBoC
Chinese rate cuts ‘imminent' as some of the worst figures since the financial crisis indicate economic slowdown is sharper than predicted, analysts say
Colombian paper finds structure matters in modelling oil shocks
Working paper finds evidence that the impact of an oil price shock on an oil-exporting country such as Colombia can be large, but depends on the structure of the economy
Greek governor calls for reform and coherent growth plan
Yannis Stournaras urges government to honour Greece’s commitments and reach a prompt agreement with its European partners, then focus on creating sustainable growth
Estonian governor tells MPs central banks cannot create long-term growth
Ardo Hansson says QE in the eurozone will help to improve confidence, but reforms are necessary for investors to believe the economy will grow
Haldane says ‘cocktail’ of psychology and sociology behind divergent growth
BoE chief economist draws on history, sociology and psychology – as well as economics – in seeking to explain why growth rates differ so widely