Macroeconomics
Dudley goes against Trump’s protectionist line
New York Fed president criticises protectionism as Donald Trump steps up rhetoric; questions value of excessive reserves accumulation
BIS paper uses ‘shadow rate’ to study market expectations
Fan Dora Xia and Jing Cynthia Wu find they can estimate expectations over a longer horizon by using a shadow rate term structure model
Lacklustre recovery down to pre-crisis factors – research
San Francisco Fed article says weak recovery in the US due to long-running factors, and not the immediate impact of the global crisis
World does not have to be ‘hostage’ to technology – Wilkins
Finding a way to control the market power of tech giants will be important, the Bank of Canada deputy says
Deflation tends to de-anchor expectations – BIS paper
Deflationary episodes seem to render expectations lower and more backward-looking
Cœuré: ‘three lines of defence’ needed to protect ECB
The ECB executive board member says without reforms the ECB may end up having to “test the limits of its mandate”
Misinterpreting commodity price swings can be damaging – BIS paper
Whether movements are down to supply shocks or changes in global demand matters for policy, and mistakes can be procyclical when central banks act together
Liberalising services trade could tackle imbalances – BoE paper
Finding ways of reducing barriers to services trade could substantially cut imbalances
ESM hails Greece’s progress in third bailout
The country should exit the programme in August as growth accelerates and bond yields fall
Menon warns of Singapore's ‘demographic trilemma’
MAS chief says Singapore “must accept” slower growth of the labour force, but should also face up to the need for solutions
BIS paper: unconventional policies may have depressed natural rate
Economists find shifts in estimates of the natural rate co-move with unexpected changes in unconventional policy
Bundesbank panellists call for change in German ‘mindset’
Mario Monti says he would like to free Germans from their economic “straightjacket”, while Benoît Cœuré hints at need for rebalancing
BoE economists challenge conventional wisdom on yield curve
Steeper curve may not be as good for bank profitability as widely believed
BoE’s Tenreyro sees hopeful signs for UK productivity
Many factors dragging on productivity may soon start to fade, MPC member says, though the UK seems to be missing out on a global investment boom
‘Goldilocks economy’ implies bears may not be far away – Menon
Despite reasons for optimism, “three grumpy bears” may soon return, says MAS chief
Dudley warns Trump tax plan leaves US finances ‘unsustainable’
New York Fed chief says policymakers may have to tighten rates harder to offset stimulus
BIS paper explores effects of global factors on inflation
Authors find impact of global factors is mainly temporary, but the effects appear more significant for countries without long-established inflation targets
Macroeconomics suffers from blind spot, says Borio
Misallocated resources can explain a large part of recent productivity slowdowns, but thinking in aggregate terms obscures this, says BIS economist
BIS paper asks what makes emerging market banks profitable
Both bank-specific and economy-wide factors affect banks’ profitability, authors find
Fed paper studies inequality in three dimensions
Authors find examining three dimensions simultaneously gives new insights
Economists are misinterpreting ‘Triffin dilemma’, says BIS paper
Michael Bordo and Robert McCauley argue there was nothing certain about the collapse of Bretton Woods, but Triffin’s successful prediction led others to mistakenly reapply his theory
Early asset purchases much more successful – BIS paper
Authors find effectiveness falls over time as the shock wears off, questioning the value of long-running quantitative easing
India needs radical reforms, says academic
State ownership has gone too far but the state needs stronger capabilities in other areas, argues Vijay Joshi
More work needed on supply channel of finance – BIS paper
Demand-side links between the financial and real sectors are better understood, say authors