Monetary policy
Central Bank of Iceland hails successful year
Annual report for 2014 shows inflation fell, central bank introduced prudential measures in preparation for capital account liberalisation, and profits returned to positive figures
Haldane warns expectations could drag down wages
Lower inflation expectations putting downward pressure on wages, and could contribute to greater persistence of low or falling inflation, BoE chief economist says
BoE minutes highlight risks from sterling strength
MPC members raise concerns over divergence of monetary policy and the resulting strength of the UK’s currency, which has the potential to hold inflation lower for longer
Finnish paper: DSGE model with shadow banks sheds light on China
Bank of Finland discussion paper models Chinese monetary policy transmission using a DSGE model augmented with shadow banking and interest rate controls
Czech paper finds mixed evidence of spillovers from ECB unconventional policies
Impact of spillovers depends on whether the policy is conventional or unconventional, and has a larger impact on inflation than on growth, working paper finds
BoE panellists: Central banks need better understanding of policy interactions
Policy-makers are already having to cope in practice with a ‘tripartite’ mandate while research struggles to catch up, raising the possibility of dangerous blind spots
BoE unveils wide-ranging research agenda
‘One Bank’ research agenda seeks to shake up the status quo and help theory catch up with the practice of new central bank mandates and looming challenges
Forbes asks if BoE’s ‘Midas touch’ has been tarnished
MPC member says low interest rates carry various risks, including falling productivity and rising inequality, but argues the evidence is mixed and such factors are outside the BoE’s mandate
Saccomanni sees political not analytical constraints to policy cooperation
Former Bank of Italy deputy says analytical framework for international monetary policy cooperation already exists, but G-20 countries are being held back by politics
BoE’s MPC members diverge on interest rate outlook
Only common ground between committee members is rates likely to rise ‘over the next three years’, as some see the potential for further easing while others want rate hike soon, minutes show
BIS paper finds stabilisation policy can impact long-run growth
Use of short-run interest rates has implications for long-run growth due to their effect on credit and liquidity supply, BIS working paper finds
BoE could ease with deflation looming
Record low inflation may turn negative in the spring, inflation report shows; Mark Carney says rate cuts and QE remain options but BoE still expects next move to be a rate hike
BoJ nominee Harada: monetary stimulus, fiscal discipline
A review of Yutaka Harada’s published papers and articles reveals the Bank of Japan Policy Board nominee is likely to favour more stimulus from the central bank and less from the government
Ageing population may boost inflation, BIS paper finds
Working paper challenges received wisdom that an ageing population causes disinflation, with implications for the correct calibration of monetary policy
Sama governor calls for subsidy cuts
Fahad Al-Mubarak says the Saudi Arabian economy is being hampered by various inefficiencies, including excessive subsidies on energy and water
Dallas Fed report calls for better understanding of global finance
Globalisation annual report urges monetary policy-makers to take account of global financial flows and seeks a better understanding of interdependence
Obstfeld warns emerging markets face dual trilemmas
BIS working paper dissects emerging markets’ ability to resist monetary policy spill-overs, finding the demands of monetary and financial trilemmas make self-defence difficult or impossible
BoE’s Miles: Monetary policy 'does not hold all the cards'
Monetary policy cannot be expected to achieve price stability 'in isolation from things fiscal’, argues David Miles, MPC member at the Bank of England
King says further easing unlikely to work
Former Bank of England governor warns monetary policy is reaching the limit of its ability to stimulate, with the global economy trapped in ‘quite serious disequilibria’
Leaning against the wind may boost shadow banking: BoE researchers
Contractionary monetary policy may encourage growth of shadow banking even as it restricts commercial banks, casting doubt on the ability of central banks to ‘lean against the wind’
Rajan catches markets off guard with unscheduled rate cut
Markets get ‘pleasant surprise’ as Reserve Bank of India unveils a rate cut outside its normal policy schedule; analysts predict further cuts to come
Government spend no more effective at ZLB – NBER paper
US government spending did not become more powerful when monetary policy hit a zero lower bound, according to a working paper published by the National Bureau of Economic Research
Bank of England unveils sweeping transparency changes
Bank of England to publish transcripts of monetary policy meetings, cut number of meetings, revamp committee structures and more; Barry Eichengreen says benefits likely to ‘dominate’ costs
Brainard says Federal Reserve monetary policy can ‘lean against the wind’
FOMC member says limited range of macro-prudential tools means Fed is more likely than some other central banks to use monetary policy for financial stability purposes – but there are risks