Sovereign debt
IMF working paper warns of dangers in sovereign debt restructuring
Researchers find debt restructurings have adverse impact on economic growth; say debt sustainability is a crucial consideration
Central Bank of Barbados governor praises government’s fiscal strategy
DeLisle Worrell says Barbadian government’s policy strategy is appropriate to the ‘economic reality’; follows downgrade of sovereign debt to BB+ in July
RBI paper measures threshold of sustainable current account deficit in India
Working paper warns of risks posed by large current account deficits; finds sustainable level of deficit has risen since balance of payments crisis in the 1990s
IMF paper studies effect of global environment on domestic bond yields
Working paper analyses link between global economic conditions and emerging market domestic bond yields; finds financial market turmoil raises sensitivity to government spending increases
Bank of Israel warns of ‘lack of clarity’ in government fiscal policy
Report assesses domestic and external economic conditions affecting the Bank of Israel’s interest rate decision; low CPI, weak shekel and fiscal policy uncertainty contribute to rate hold
Fischer calls for Israeli government action on deficit
Bank of Israel governor says government’s decision to increase its fiscal deficit instead of raising taxes will hurt future generations; impact will be most acute should eurozone fragment
IMF urges US policy-makers to take action against fiscal cliff
Conclusions of IMF Article IV consultation with US highlight risks from fiscal cliff and debt ceiling; calls on policy-makers to strike deal at ‘delicate juncture’ for world economy
IMF paper warns against delays in Japanese fiscal consolidation
Working paper studies impact of budget deficit in Japan on intergenerational inequality; finds delaying budget cuts would adversely affect younger generations
Thailand reports improved economic conditions
Senior director of macroeconomic and monetary policy department notes overall better conditions in second quarter of 2012; European debt crisis has caused problems for export market nonetheless
Central Bank of Ireland positive in quarterly bulletin
Quarterly bulletin suggests Irish growth is being held back by negative external developments; however, domestic indicators show signs of strength
Ex-UK MPC members discuss future of eurozone
Panellists at event in London say euro will survive but with a smaller group of countries; argue UK is in dangerous position to respond to eurozone collapse
IMF paper warns against frontloaded fiscal adjustment
Working paper studies changes in fiscal multipliers based on economy’s position in the business cycle; cautions that large budget cuts are likely to create or worsen recessions
RBI paper finds monetary policy undermined by unsustainable deficits
Researchers assess link between high government debt and persistent inflation; find restrictive monetary policy may struggle to contain inflation if accompanied by a large budget deficit
RBI research examines debt management conflict of interest
Working paper discusses whether the Reserve Bank of India’s dual monetary policy and debt management roles affect price stability mandate; finds little evidence of impact
IMF paper finds stronger and more complex fiscal rules following crises
Working paper compiles dataset of national and supra-national fiscal rules; suggests rules were strengthened after crises in the 1990s and after the financial crisis
World Gold Council says disinflation may support gold demand
Statistical commentary argues gold price may increase due to disinflation; says current economic environment ‘supportive’ of gold demand
Italian governor reviews uncertain outlook as Moody’s downgrades
Bank of Italy governor Ignazio Visco says banks have made progress in strengthening finances but warns of numerous downside risks; Moody’s downgrades Italy’s government bond rating
ECB paper studies sovereign debt and growth links
Working paper studies relationship between different levels of sovereign debt and growth; finds increasing debt only boosts short-run growth up to a certain threshold
Draghi says closer union will achieve stability in Europe
Mario Draghi says quality of reforms and implementation ‘absolutely essential’; sets out vision of future union based on financial, fiscal, economic and political integration
IMF paper models sovereign and bank feedback loops
Working paper develops model of interdependence of bank and fiscal solvency; finds relationship can lead to a ‘self-fulfilling crisis’
Central Bank of Colombia paper analyses sovereign default risk
Working paper assesses main factors determining risk of Colombian government defaulting on its debt; finds different factors are important at different debt maturities
BoJ deputy governor urges EU to accelerate reform efforts
Bank of Japan deputy governor Hirohide Yamaguchi calls on EU to speed up efforts in tackling debt problems; says Asia must prepare for further shocks
IMF paper analyses US capital flows and debt
Fund working paper develops model of international capital flows and resulting impact on debt dynamics; finds equity and FDI returns allowed US to maintain high debt levels
Hungarian central bank blasts government tax plan
National Bank of Hungary says government plans for financial transaction tax threatens central bank independence; levy is latest development in conflict between central bank and government