Monetary policy
Turkish central bank eyes return to normality
Central bank plans to return to a simpler, more conventional monetary policy framework, but politics may yet get in the way
Capital controls ineffective at handling policy trilemma, ECB paper finds
Emerging market capital controls have a limited impact on monetary policy trilemma variables and come with spillover effects, the authors warn
PBoC steps in with rate cuts
Central bank cuts interest rates and reserve requirements amid deepening crisis, and uses the opportunity to push liberalisation agenda
Falling real rates put US ‘at risk of financial instability’, says Kocherlakota
Minneapolis Fed president warns that long-run real interest rates are falling and risk causing financial instability and ineffectual monetary policy
Trawl through BoJ archives reveals emergence of current policy-making
Study of failures and successes of BoJ policy-making in the 1980s reveals the emergence of current thinking about how best to conduct monetary policy
FOMC inching towards rate hike, minutes hint
Minutes of July meeting show some members are still concerned that labour market and inflation data are not strong enough for a hike, but several think the economy is nearly ready
Irish central bank paper finds high cost to hasty austerity
Economists find most of the costs of fiscal consolidation from 2011-13 could have been avoided if policy-makers waited until the zero lower bound was no longer a constraint
Iceland’s Guðmundsson sees role for IMF as arbiter of capital flows
Small open economies are being forced to take sub-optimal actions to defend themselves from capital flows, and while global ‘rules of the game’ are far off, IMF monitoring could be a first step
Markets regain confidence after PBoC officials intervene
Yi Gang and Zhang Xiaohui step in to reassure markets, helping to reverse some of the renminbi’s fall; Asian currencies also slide and Bank Indonesia takes action
Sarb research updates forecasting model
Refinements to central bank’s semi-structural general equilibrium model aim to better reflect the South African economy over the inflation-targeting period
Managing financial stability, monetary systems and the economic order
If policy-makers fail to address the challenges presented by strong feedback loops between the economic and monetary systems, the next crisis could seriously damage faith in market-based economies
Book notes: Money and Trade Wars in Interwar Europe, by Alessandro Roselli
Alessandro Roselli’s book on interwar Europe should be compulsory reading for all those who are handling or interested in the current crisis in the euro area
Labour markets need good training policies, NY Fed president says
Federal Reserve of New York President William Dudley says monetary policy can help labour markets recover but that good training and placement policies are key to workforce development
Uganda raises rates again to tackle inflation risks
Bank of Uganda hikes its policy rate to head off inflationary pressures but analyst warns the move will be ineffective unless overnight rates on the interbank market respond
IMF paper warns Japan’s QQE may hit the buffers in 2017
Bank of Japan may have to look for new forms of monetary stimulus as it runs up against a shortage of government bonds, which could begin to distort markets
Israel grapples with high house prices and low inflation
Monetary policy report flags concerns by committee members that low interest rates may be fuelling high and rising house prices, but overall the risks to inflation are seen as more severe
Fed leaves door open for rate hike
FOMC statement offers hints that the US labour market is reaching a position where a hike could be possible, indicating interest rates are still expected to rise this year
Gertjan Vlieghe to replace Miles on BoE monetary policy committee
Economist used to be assistant to Mervyn King and is now partner at an asset manager; previous research has focused on conducting monetary policy in the presence of imperfect credit markets
RBI automates liquidity operations
Central bank launches straight-through processing for three of its liquidity operations, cutting settlement times as part of broader efforts to enhance liquidity management
ECB bulletin: Too early to tell if inflation has turned a corner
Inflation in the eurozone appears to be moving upwards, but strip away transitory factors and the picture becomes much more blurry
Bank of Korea researchers dig into disaggregated data on inflation targeting
Adopting inflation targeting in Korea lowered the mean, volatility and persistence of inflation throughout the country, but a look at disaggregated data reveals more about transmission
UK government launches plan to improve BoE governance
Bank of England Bill proposes changes to committee structure, adjustments to the Court, establishing new roles and axing old ones, and audits to assess value for money
Carney sees BoE inching towards rate hike
BoE governor says debate over rate hike will ‘come into sharper relief’ around turn of the year, but reiterates upward path will be shallow and any hike is data-dependent
Former Afghan governor returns for second term
Khalilullah Sediq takes over for a second time as governor of the Bank of Afghanistan, following a spell in the private sector