Macroeconomics
Norges Bank deputy pits Keynes against Hayek
Jon Nicolaisen says European countries may have invoked the lessons of Keynes without paying heed to the warnings of Hayek – both views are needed to avoid problems
IMF working paper assess fiscal councils
Research considers the efficacy of independent fiscal institutions in “taming the deficit bias” that emerged in the 1970s, as well as assessing their performance more recently
IMF urges action to prevent global economy ‘stalling’ and ease central bank burden
Maurice Obstfeld highlights risk of “widespread secular stagnation” as IMF publishes latest WEO; details fiscal and structural support needed to ease burden on monetary policy
Perceived long-term eurozone deflation risk unaffected by oil – paper
Between 2010 and 2012, perceived short-term deflation risk was “significantly” affected by oil prices, while medium-term risk was only affected between 2013 and 2015, research suggests
Lower real interest rates may harm productivity growth, researchers say
Lower real interest rates may reduce productivity growth rates, researchers say; Italy and Spain have suffered low or negative TFP growth during existence of euro
BoJ’s Funo calls for efforts to revive potential growth
Board member uses first speech to back continued expansionary policy, highlighting steps that could help raise Japan’s potential growth from current depressed levels
Villeroy de Galhau calls for eurozone finance minister
Banque de France governor calls for single eurozone finance minister to co-ordinate fiscal and structural policy; warns of dangers of “overburdening monetary policy”
Government approves final stage of Thai development plan
Bank of Thailand will promote electronic payments in latest phase of financial sector master plan; all phases to be completed by 2020
Capital flow measures needed before offshore krona auction, says Guðmundsson
If the currency auction goes to plan, inward flows could strengthen and the Central Bank of Iceland needs the tools to resist them, its governor says
BoE’s Forbes outlines new thinking on current account imbalances
Breaking current account into trade and financial components allows more detailed analysis of when a large imbalance is dangerous and what shocks could cause trouble
Inflation expectations well-anchored, Richmond Fed president says
Lacker tells audience at Banque de France he believes expectations are anchored, despite drop in inflation compensation; Villeroy de Galhau notes drop in market-based measures in eurozone
Research sheds light on RBNZ concerns over inflation expectations
Article authored by, among others, John McDermott argues the risk of inflation expectations losing their anchor has increased; concerns were a ‘primary motive’ for last week’s rate cut
Paper finds evidence in favour of ‘exchange-rate-anchored inflation targeting’
A working paper published by the IMF finds ‘tight management’ of the exchange rate can help support inflation targeting in ‘less developed countries’
Brainard warns of segmentation of liquidity
Recent changes in liquidity practices may heighten financial markets’ vulnerability in stressed conditions, Brainard says; downward pressures on inflation remain, she adds
RBA’s Lowe says productivity still a problem
Australia has proven resilient through an uncomfortable rebalancing phase, but the economy is still plagued by disappointing productivity growth, deputy governor says
PBoC's Zhou dismisses talk of renminbi devaluation ahead of G20 meetings
Chinese governor says country is 'opposed' to competitive devaluations; argues capital outflows likely to subside given 'strong fundamentals'
Caruana marks out dangerous nexus between debt, oil and the US dollar
BIS chief points to interactions of dollar borrowing by emerging markets, US rate hikes and the oil price, as latest data suggests world may be balanced on the edge of a drop in global liquidity
Issing says eurozone status quo is in danger
Former ECB board member says Europe’s monetary union is still plagued by problems caused by absence of political integration, which could pull the eurozone apart