Output gap
DNB paper examines robustness of monetary policy
Policy must avoid tail risks caused by central banks’ uncertainty over output gap, researchers argue
Jackson Hole in the wake of policy rules
Symposium heralds a shift to relying on incoming data and judgement, rather than rules or even formal models, to hit inflation targets, writes Barry Eichengreen
Challenges ahead for Ueda’s easing commitment
BoJ governor’s plan to maintain monetary easing until 2% inflation is hit may not be easy, writes Sayuri Shirai
ECB’s Panetta warns tighter policy could inflict unnecessary damage
Monetary policy could permanently reduce potential output, argues ECB board member
Economy’s ‘first responders’ now in the line of fire
Forceful but late interventions to combat inflation raise the risk of central bank overreactions
How central bank mistakes after 2019 led to inflation
Central banks must acknowledge their own mistakes and outline concrete steps to restore the public’s confidence in their ability to ensure price stability, write Graeme Wheeler and Bryce Wilkinson*
Tackling surging inflation
Central banks around the world are grappling with rapid price rises, with some taking very different routes to one another
James Bullard on Fed policy, action and governance
St Louis president calls for tapering amid “exceptional” job market and risk of “more persistent” inflation, quantifies ‘big tent language’ for pioneering AIT move, and details Congress’s role in Fed ethics oversight
Covid-19, crypto and climate weigh on global economy – GFSR
Central banks face difficult “intertemporal trade-offs”; poorer nations unlikely to regain pre-Covid growth levels for “many, many years”, says IMF’s financial counsellor Tobias Adrian
Summers fears for Fed’s ability to remove ‘punchbowl’
Central banks may not be able to counter inflation threat amid possible return to 1960s economics, says former US Treasury secretary
Larry Summers on stagflation risks, lessons from Delphi and never-ending ‘punch’
The former US Treasury secretary speaks about fiscal ‘overexpansion’, Fed/Treasury debt discord, the pitfalls of ‘unknown unknowns’ and central bankers ‘unable’ to remove the ‘punchbowl’
BoE officials fear long-term ‘scarring’ as uncertainty hits record high
MPC members broadly gloomy on the outlook, but there is “huge” uncertainty, says Andrew Bailey
Growth has replaced slack in Phillips curve relationship – Cleveland Fed paper
Findings could have “substantial disinflationary” implications during current recession, researchers say
Iran’s race towards monetary policy reform faces high hurdle reality
The Majlis Research Center’s Tohid Atashbar says positive outcomes from the Iranian central bank’s fast-tracking of monetary policy reform – made in response to Covid-19 and US sanctions – may prove difficult to deliver
Phillips curve flatter when inflation is low – researchers
Downward wage and price rigidities cause non-linearity in Phillips curve, says Peterson Institute paper
Fed set to adopt ‘elements’ of price-level targeting
Covid-19 could act as a catalyst for a Janet Yellen-supported Fed move to adopt elements of price-level targeting. But questions remain about the timing of such a move
Strict lockdown could cause 37% quarterly GDP contraction – RBNZ
Assessment shows impact of containment measures on New Zealand’s economic output
Tackling ‘dead-end’ monetary policy
A shift to lower inflation targets would help central banks escape forever-loose monetary policy, writes former IMF chief Jacques de Larosière
Cleveland Fed paper looks for reasons for flatter Phillips curve
Monetary policy responses to “output deviations” may be key factor, researcher argues
Loose financial conditions predict output gap – NY Fed paper
Policy-makers can make significant welfare gains by greater focus on financial conditions – researchers
Open and closed economy central banks react differently to inflation – research
Some economies respond more strongly to certain variables, Fernando Leibovici says