Unconventional monetary policy
Svensson launches fresh attack on leaning against the wind
Lars Svensson outlines “simple and transparent framework” he hopes will guide debate, as other papers challenge his results
Fed paper studies how to tackle the lower bound
Simple policy rules lead to inflation falling “systematically” short of 2% target; pursuing higher inflation may help but comes at a cost
San Francisco’s Williams: monetary policy has reached ‘limit’
Monetary policy has done all that it can to foster growth, says San Fran president, calling on fiscal policy to now “step up”
The changing composition of central bank balance sheets
Quantitative easing may have been necessary, but it has created worrying distortions and has probably discouraged structural change, while deflecting attention away from ever-greater levels of debt leverage
Fed paper: corporate bond buying can misallocate capital
Capital misallocation effects can mean corporate bond purchase schemes underperform QE based on sovereign bonds, say economists
IMF deems negative rates to have had ‘no major side effects’
IMF paper explores the impact of negative interest rates on bank behaviour, concluding the transmission to money markets and bond yields has worked well
Fed can no longer ‘wait and see’, says Williams
Waiting to unwind the balance sheet could “overheat the economy”, says San Fran president, who believes the US has “fully recovered” from the recession
Bank of Japan cuts inflation forecast as policy remains on hold
The BoJ cuts its forecast for prices as it struggles to hit its inflation target; keeps policy steady
The BoJ’s exit policy and balance sheet risks
The Bank of Japan will need to follow a meticulous sequencing of events as its ‘normalises’ monetary policy, making current concerns about negative equity appear premature
Fed paper: portfolio holdings have ‘statistically significant’ effect on rates
Research studies composition of Fed’s Treasury portfolio and impact on yields from 1985-2016
Policy mix has important implications for spillovers – Fed’s Brainard
Fed governor says degree of divergence between central banks and choice of policy tool affects the exchange rate impact and therefore spillovers
BoJ ups asset purchases to curb bond market pressure
The Bank of Japan has increased the size of JGB purchase operation and announced unlimited purchases of 10-year JGBs at a fixed rate of 0.11%
BoJ faces growing communications challenge
Japanese central bank embarks on its third attempt at unlimited fixed-rate outright JGB purchases; further fiscal stimulus would do little to help
BoE bloggers suggest central banks could use equity-financed QE
Economists raise ideas for future balance sheet innovations, including digital currencies, helicopter money drops and equity-based quantitative easing
BoJ told to improve communication on potential exit from stimulus
Speculation is growing over the timing and method of the exit from the stimulus programme, creating a new communication challenge for the BoJ
Former central bank governors debate unconventional monetary policy
Trichet, Shirakawa and Weber agree unconventional tools may have outstayed their welcome; costs of tools used during the crisis will not be known for some time, Weber says
Inflation overshoot should affect adaptive part of expectations, says Kuroda
Bank of Japan governor says there is still a long way to go until the price stability target is achieved
Surprise policy announcements impact cash demand and consumption - paper
Unanticipated policy announcements can significantly reduce a consumer's monthly ATM withdrawals
BoJ’s Sakurai defends aggressive monetary easing
A member of the policy board says yield-curve control allows flexibility for the central bank to implement monetary easing
BoJ's balance sheet surpasses that of the Fed
BoJ's balance sheet exceeds ¥500 trillion, a fraction larger than that of the Federal Reserve in absolute terms, and much larger as a percentage of GDP
Fed minutes shed light on balance sheet shrinkage plan
System of caps would allow gradual reductions in the reinvestment of securities held under the QE programme
Bernanke urges BoJ to keep up its easing efforts
Former Fed chair recommends the central bank continue its aggressive easing, though he concedes “bad luck” could yet cause it to fail
ECB paper looks at PSPP’s ‘flow effects’ on sovereign bond yields
“Flow effects” have limited but real impact, researchers find
BoJ should provide ‘more realistic’ projections – former policy board member
Claims constant overestimation of inflation expectations undermines credibility