Unemployment
Fed presidents still divided on timing of rate hike
Heads of the Federal Reserve Banks in Atlanta, Boston and Cleveland offer different takes on current economic conditions; all united in desire for more data
Chilean paper analyses unemployment’s impact on wages
The impact of unemployment spells on wages is high, but the volatility ‘increases much more during recessions’, research finds
Expectations have variable impact, finds ECB paper
Working paper suggests there have been ‘significant changes’ in the degree to which expectations have driven unemployment, with a particularly large effect during 2008 financial crisis
Hellwig warns against expanding financial stability mandate too far
Martin Hellwig presents his thoughts on how to strike a balance between the macroeconomic and financial stability objectives of monetary policy
Yellen sees potential benefits in ‘tight’ labour market
Fed chair Janet Yellen says allowing unemployment to fall below its longer-run level for a short time could help return inflation to target quicker and boost productivity
ECB forecasts ‘gradual’ increase in US inflation
Economic bulletin published by ECB agrees with FOMC that inflation will increase gradually as labour market conditions improve and impact of low oil prices and high dollar fades
Fed keeps options open as countdown to lift-off begins
FOMC drops the reference to being ‘patient’ before normalising policy, signalling a rate hike could arrive as early as June, but tempers expectations with more cautious economic assessment
ECB paper models Philips curve from professional forecasts
Working paper finds the curve consistent with professional forecasts has flattened since the financial crisis, with the relationship between inflation and unemployment weakening
US banks hold up under Fed stress tests
Latest annual stress tests show 31 largest bank-holding companies would lose $490 billion under the Fed’s severely adverse scenario, which has been tightened compared to 2014
French paper models flattening Philips curve
Working paper develops a two-country, new-Keynesian model to replicate the flattening of the curve in developed countries over the past 25 years, a trend widely attributed to globalisation
Fed officials debate research on equilibrium real rates
Research presented at US Monetary Policy Forum says uncertainty around equilibrium rate means the Fed should delay tightening policy; Loretta Mester and William Dudley discuss findings
Paper tackles US inflation puzzle with new Phillips curve
Authors of research published by IMF find core inflation movements can be explained by anchored expectations and short-term unemployment “stories”
Researchers find evidence of ‘European unemployment cycle’
Working paper published by The Netherlands Bank separates the different origins of unemployment in Europe, finding the continent- and country-level factors most influential
BoE research identifies strong impact from long-term unemployment on inflation
Working paper finds evidence that models incorporating linear Phillips curves are underestimating the effect of long-term unemployment on wage inflation
BoE’s Weale posits method of overcoming uncertainty
MPC member says studying rates of change can help overcome uncertainty about spare capacity and the natural rate of interest when setting policy
Carney says 'striking' labour market differences will prompt ‘less synchronised' monetary policy
The Bank of England governor addresses UK wage conundrum; argues US is in worse position as its headline unemployment rate is 'much better than the details'
Dallas Fed president praises India PM Modi
Richard Fisher describes Texas as the ‘crucible of US job creation', noting that without it US would not yet have reached pre-recession employment levels
Draghi encourages ‘greater role’ for fiscal policy
ECB president says a policy mix of monetary, fiscal and structural measures is necessary to keep the eurozone recovery on track, in his remarks at Jackson Hole
Korea needs more women and young people in work, paper finds
Labour market ‘duality' and low youth and female employment are holding back growth, according to paper written by Bank of Korea and IMF economists
Stagnant wages amid falling unemployment creates headache for BoE
Bank of England halves wage growth forecast for 2014 as unemployment seen falling below 6%; Mark Carney notes ‘wide range of views' on MPC about degree of slack
Paper examines optimal monetary policy for wages and hours worked
Firms tend to pay too little for too many hours, economists argue in ECB-published paper; monetary policy should not target inflation too strictly, they say
The challenges for central banks
Demands are being made for central banks to consider financial stability alongside price stability, as a key component of their monetary policy. But that is nothing new for central banks
Adjusted calculation of US employment-to-population ratio signals return to pre-crisis level
Atlanta Fed paper uses micro-data to account for individual characteristics and probability of labour force participation; finds ratio has regained pre-recession level of nearly 63%
Lockhart needs higher wage growth and participation before raising rates
Atlanta Fed president says firmer wage growth and a higher participation rate are needed before the Federal Open Market Committee should raise interest rates