News/Economics
Low productivity might not be weighing on real rates – research
Long-run correlations imply there is little reason to believe low productivity is associated with low rates, Cleveland Fed economist finds
AI adoption lag could explain productivity shortfall – research
Erik Brynjolfsson, Daniel Rock and Chad Syverson argue the productivity slowdown is not as surprising as it may seem, and there are reasons to be hopeful
Low inflation partly down to luck – CEPR report
David Miles and co-authors argue advanced economies’ luck on inflation could run out; recommend central banks prepare
Communication technology helps explain productivity puzzle – Fed paper
Properly accounting for ICT services produces “very large” boost to US labour productivity figures, authors say
Cross-border credit slips back into contraction
Latest BIS statistics show rebound of cross-border claims was temporary; China bucks trend with rapid growth of inward credit
Low-paid jobs may explain flat Phillips curve – research
As recovery continues, this phenomenon should dissipate, authors say
IMF: global recovery is broad but incomplete
Fund ups its growth forecasts but says many are missing out; Maurice Obstfeld urges policymakers to take action while “times are good”
Markets upbeat on strengthening US wage growth figures
Non-farm payrolls drop slightly but wages appear to be gathering pace; figures impacted by hurricanes Irma and Harvey
Theory of inflation dynamics is not good enough, warns Tarullo
Former Fed governor says economists have “almost paradoxical” mix of scepticism towards and reliance on shaky concepts
BIS report sheds light on innovative big data use
Central banks across the globe are turning to big data to solve statistical issues, improve banking supervision, and analyse communications
Good data management key to extracting value from big data – panellists
Big data proves most useful when backed by a well-designed production chain – but it comes at a cost, central bank data experts say
Central banks may be thinking wrongly about inflation – Borio
BIS economist says inflation may not always and everywhere be a monetary phenomenon, which could help explain why the natural rate is so low
Philadelphia Fed launches new research institute
Research body is tasked with better understanding consumer behaviour, particularly in relation to financial markets
Paper challenges Rey’s ideas on global financial cycle
Cerutti, Claessens and Rose contest idea that capital flows are mainly the result of common shocks or developments in the US
Latin America lags in use of robotics, but faces same threats
Robots threaten over 50% of jobs across the region, report warns, though they offer an opportunity to boost productivity
Opaque money markets work well, Nobel laureate says
Bengt Holmström says policymakers should not try to make money markets more transparent
New NY Fed dataset shows weakening labour market
New York Fed unveils new, more granular labour market data; results so far indicate wage growth is still elusive
IMF’s Adrian sketches macro-financial model of term premium
Tobias Adrian outlines a new way of modelling financial cycles within a New Keynesian framework, which produces a good fit with empirical observations on the term structure
Wage growth may be stronger than headline figures suggest
San Francisco Fed researchers point to evidence that headline figures may overstate wage weakness; UK figures provide a positive surprise
Goodhart and Pradhan: demographics will reverse ‘multi-decade’ trends
Ageing population is likely to put upward pressure on real interest rates and inflation, and push down inequality, economists say
UK economy vulnerable to consumption-led recession
Fragile consumer spending could take a toll on growth, former BoE officials warn, leaving the central bank with a tough job ahead
Flexible working may shift Nairu, ECB’s Mersch warns
Technology may increase insecurity and weaken collective bargaining, says senior ECB figure
Yellen warns of debt impact on productivity
Fed chair states in “strongest possible terms” that the current spending by the US government is unsustainable and could harm productivity
Inflation data causes rift in FOMC
Fed officials discuss whether incoming low inflation data is “transitory” or is a sign of worrying things to come; minutes outline balance sheet unwinding but date remains unknown