Economics
IMF’s Adrian sketches macro-financial model of term premium
Tobias Adrian outlines a new way of modelling financial cycles within a New Keynesian framework, which produces a good fit with empirical observations on the term structure
Oil prices feed through to core inflation – Fed paper
Research finds changes in the oil price have a small but statistically significant impact on core inflation
National Bank of Denmark sees "major challenges" for Greenland’s economy
Greenland is experiencing an economic boom, but needs to diversify its economy; central bank warns political independence may be a mistake
Wage growth may be stronger than headline figures suggest
San Francisco Fed researchers point to evidence that headline figures may overstate wage weakness; UK figures provide a positive surprise
RBI launches economics blog
“Mint Street Memos” comprise brief reports and analysis from RBI economists; first post studies beneficial effects of demonetisation for “financialisation” of savings
Goodhart and Pradhan: demographics will reverse ‘multi-decade’ trends
Ageing population is likely to put upward pressure on real interest rates and inflation, and push down inequality, economists say
UK economy vulnerable to consumption-led recession
Fragile consumer spending could take a toll on growth, former BoE officials warn, leaving the central bank with a tough job ahead
Piecing together a financial theory of stagnation
Ideas presented at recent BIS annual meetings reveal an emerging framework that explains how the financial system may be dragging down the real economy; Hélène Rey was the latest to contribute
Paper proposes method to estimate network of exposures
Researcher draws on aggregate exposures and market data to build a more complete picture of the network of bank exposures
Flexible working may shift Nairu, ECB’s Mersch warns
Technology may increase insecurity and weaken collective bargaining, says senior ECB figure
Singapore’s inflation sees sudden drop in June
Sharp fall in inflation was due to the falling prices of housing maintenance and repairs, triggered by the timing of government rebates
BoE economists issue ‘call to arms’ for macro-prudential research
Researchers outline a simple framework to help understand the macro-prudential “balancing act”, but say there is a long way to go in developing a definitive model
BoE paper warns escape from secular stagnation may ‘beggar thy self’
Authors outline an unappealing situation where the only escape comes from currency depreciation, but may nevertheless end up harming domestic welfare
Non-banks drive rebound in cross-border banking – BIS
First-quarter statistics show non-banks helped drive a turnaround of cross-border banking flows, which had been in retreat
BoE’s Broadbent: globalisation has been largely a good thing
Bank of England deputy says flexible labour market has helped dull the pain of adjustment to trade shocks, while lower prices have most benefited the poorest groups
Yellen warns of debt impact on productivity
Fed chair states in “strongest possible terms” that the current spending by the US government is unsustainable and could harm productivity
CEPR paper sketches ‘radical, realistic’ Greek reform plan
Stanford and Yale economists outline “unorthodox” policies that could put Greek debt on a sustainable footing – and might be acceptable to all negotiating parties
St Louis’s Bullard on the future of the Fed and its monetary policy record
St Louis Fed president James Bullard rails against east coast dominance, favours aspects of the Choice Act and says Fed monetary policy was a “factor” that fuelled crisis
US policy having a larger impact on credit – BIS paper
Monetary policy’s effects on credit and housing markets have grown while the effects on inflation have weakened, paper finds
Inflation data causes rift in FOMC
Fed officials discuss whether incoming low inflation data is “transitory” or is a sign of worrying things to come; minutes outline balance sheet unwinding but date remains unknown
Big data sheds light on income risk – Minneapolis Fed research
Better sources of data have allowed economists to gain new insights into how income risk changes over the cycle, says researcher
Pass-through varies across countries and time – BoE paper
Kristin Forbes and co-authors study the shocks and structural factors that help explain variations in the exchange rate’s impact on inflation
Bank of Canada broadening intelligence gathering with new survey
Systemic risk survey will be launched next year, says deputy governor, emphasising market intelligence can never provide a “perfectly complete picture”
Household balance sheet adjustment a long process – Danish study
Research into patterns of consumption and saving before and after the 2008 crisis shows deleveraging can take a long time; consumption impact of rate hike is “modest”