Economics
IMF paper examines impact of debt restructurings on growth
Growth usually declines after debt restructurings, but it can boost performance if the country exits a default spell, the authors find
Atlanta Fed paper demonstrates signalling mechanism in mortgage market
Lenders in mortgage market able to reveal quality of loans by delaying trade, authors find; loans sold five months after origination less likely to default
BoE agents see firms aiming for ‘business as usual’ in wake of Brexit
Agents’ post-Brexit review shows housing market resilience while there are reports of some firms look to relocate back to the UK in wake of sterling depreciation; IMF updates forecasts
IMF’s Lipton argues for greater economic inclusion in South Africa
David Lipton urges reforms to remedy the fact that one-third of the working population is “effectively excluded” from the economy; suggests policies to build confidence and lift growth
Bank of Italy sees Brexit having little impact on country
Commercial and financial links between Britain and Italy are much more limited than other European countries, argues the Bank of Italy in its latest economic bulletin
ECB publishes guide to its macroeconomic projections
European Central Bank publishes guide to how its staff research and publish their regular projections for the eurozone economy; gives details of models and tools used
RBNZ can evaluate forecasts using benchmarks – McDermott
Inflation has been weaker and the NZ dollar stronger than the central bank forecast, assistant governor says; can gain insight from comparing its forecast with others
Bank of Canada sees ‘modest effect’ from Brexit
Canadian and US central bankers size up cost of UK’s vote to leave the EU; Carolyn Wilkins and Patrick Harker do not see large impact on growth from direct trade effects
Short-sale disclosure rules can distort securities prices, Bundesbank paper says
European Union transparency conditions may have led to distortions in the prices of German securities by deterring short-sellers, discussion paper argues
Inflation expectations shaped by different forces in short and long term – BoE research
UK households are influenced by perceptions of actual inflation, but other factors grow in importance in the longer run, quarterly bulletin article finds
Network analysis sheds light on systemic risk – BoE paper
Pilot study of derivatives markets makes use of CDS data to map network of interlinkages, finding more than just immediate counterparty ties matter for systemic risk
Iceland’s new macroeconomic council faces up to wage challenges
Collaboration between government, central bank and labour market groups aims to bring bouts of rapid wage growth under control and better co-ordinate policy
IMF paper explores impact of financial development on wealth dispersion
Authors focus on China between 1995 and 2002; suggest lower access barriers and a deeper market can “greatly improve” welfare
Nouy sees need for rethink of reporting systems
Danièle Nouy says new thinking is needed to help banks and supervisors deal with a ‘paradigm shift’ in data collection; European reporting framework for all banks should be considered
US Phillips Curve “not broken” – IMF paper
Working paper finds economic behaviour since the crisis reflects different sources of disturbances, and not a change in the dynamics of the Phillips curve
Granular data aids policy transmission understanding, Draghi says
ECB president highlights “very rich information set” launched this week; involves reporting data on up to 35,000 daily transactions in the money market
Policy-makers should base analysis on broad set of monetary aggregates, paper argues
Analysis of the stability of demand for components of monetary aggregates in the eurozone argues against reliance on a single measure, researcher says
Lagarde encouraged Paris Club to broaden membership as South Korea joins
South Korea becomes 21st member of creditor country group; speaking at its 60th anniversary Lagarde stresses the value of expanding further
Asian central banks shift bond funds towards local currency debt
Eleven East Asia-Pacific central banks agree to close fund for buying US dollar debt issued in the region and invest the money in local currency debt instead
Reasons to be optimistic after Brexit
Both the UK and Europe can turn Brexit to their advantage, despite all the negative media reports
Dombrovskis replaces Hill in leading work on Capital Markets Union
Britain’s European finance commissioner resigns following referendum to be replaced by former Latvian PM; political timetable likely to delay further integration moves, analyst says
Central banks offer reassurance as UK votes to leave EU
Mark Carney stresses UK authorities are “well prepared” for the outcome, as central banks across globe pledge liquidity if needed; narrow vote to leave sees David Cameron announce resignation
News impacts stock prices through more than transient sentiment, paper finds
Working paper uses textual processing to examine more than 900,000 news stories; negative stories have a longer and more delayed reaction, authors find
SNB paper challenges idea that capital flows drive Swiss franc value
Empirical study finds no strong relationship between capital flows and the level of the franc, meshing with earlier literature showing asset prices can move sharply without major portfolio shifts