Macroeconomics
Banknotes: January to March 2023
A round-up of news and salient issues that have affected central bankers in the past three months
Norway and Iceland raise rates as inflation stays high
Iceland’s governor warns of wage-price spiral and says economy is overheating
Moldova cuts rates while North Macedonia tightens
Inflation falling in both countries as Moldova confronts drought and energy problems
Sarb deputy warns on growth prospects
Cassim says economy is “remarkable for the wrong reasons”
Who will replace Brainard at the Federal Reserve Board?
Another empty chair leaves another difficult choice for Joe Biden
Biden to name Brainard to White House post this week – reports
Fed vice-chair would become leading economic adviser
BoE’s Mann: high-frequency data points to possible ‘turning point’
Several indicators hint at a turn in inflation, but the MPC member wants to see more evidence
Wanted: radical ideas for inflation modelling
Hedge funds echo Mervyn King’s calls for a new approach to inflation modelling post-2022 crisis
Sarb slows rate rises as South African economy falters
Blackouts may cost up to “two percentage points” of growth this year, central bank says
Argentina and Brazil’s currency proposal met with scepticism
Experts say it is unclear whether governments want currency union or trade settlement mechanism
Lael Brainard may take White House post
Biden could ask Federal Reserve vice-chair to lead economic council, reports say
Argentina and Brazil to begin studying common currency
Minister says countries are taking “first step” in project
“Make-up” strategies may boost monetary policy, says paper
Price-level and average inflation targeting regimes stabilise import-related inflation, researchers find
Cook suggests US may need to change inflation models
Fed governor believes inflation on path to 2% but tight labour market remains upside risk
IMF’s Gopinath rewrites classic open-economy model
Mundell-Fleming model’s assumptions make it less useful for modern policy-making, economist says
Economics Benchmarks 2022 – executive summary
Key findings of the 2022 report, including model choices, governance structures and data use
Economics Benchmarks 2022 report – evolving models
Central banks continued to develop their modelling frameworks in 2022, as some longer-term trends in governance structures and research agendas emerged from the data
China needs dollar reserves to bolster renminbi – Eichengreen
Authorities must reassure global markets to make renminbi reserve currency, paper argues
ECB paper examines effects of real rates on banks’ fragility
Level of real interest rates determines whether price or scale effects predominates, researchers find
Inflation, geopolitics and the renminbi
At a Bank of China (Hong Kong)-sponsored forum, policy‑makers discussed geopolitical developments and China’s macroeconomic outlook as global inflation rises
Book notes: A monetary and fiscal history of the United States, 1961–2021, by Alan Blinder
The book’s breakthrough is its infusion of the history of fiscal policy into a theoretical framework traditionally focused on monetary instruments. It is a splendid and thrilling read
Housing plays growing role in transmitting ECB policy, paper finds
Labour earnings still most important means of transmission, researchers say
Chile’s Costa on tackling inflation, forex interventions and nowcasting
The Central Bank of Chile governor speaks about stubbornly high prices, Fed policy spillovers, reserve buffers, retail CBDC and the need to address unconscious bias
ECB paper presents new corporate default prediction method
Authors say their “distance to insolvency” measure outperforms other forecasting methods